Huntington Ingalls Industries, Inc. (HII): history, ownership, mission, how it works & makes money

A Brief History of Huntington Ingalls Industries, Inc.

Huntington Ingalls Industries, Inc. (HII) has established itself as a leading provider of military shipbuilding and defense services in the United States. As of 2024, the company is known for its significant contributions to the U.S. Navy and Coast Guard, with a focus on designing and building advanced surface combatants, amphibious assault ships, and nuclear submarines.

Company Background

HII was formed in 2011 through the merger of Northrop Grumman's Shipbuilding sector and its spin-off as an independent company. The company operates through three primary segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Mission Technologies.

Financial Performance

For the nine months ended September 30, 2024, HII reported sales and service revenues of $8.531 billion, an increase from $8.277 billion in the same period of 2023, marking a growth of 3% year-over-year. The breakdown of revenues by segment is as follows:

As of September 30, 2024, the company's total assets stood at $11.082 billion, with total liabilities of $6.879 billion, resulting in stockholders' equity of $4.203 billion. The effective income tax rate for the nine months ended September 30, 2024, was 16.6%, down from 21.9% in 2023, primarily due to research and development tax credits.

Backlog and Contract Awards

As of September 30, 2024, HII reported a total backlog of $49.419 billion, an increase from $48.121 billion at the end of 2023. This backlog includes both funded and unfunded contracts, with U.S. Government orders comprising the majority. The funded and unfunded backlog by segment is detailed below:

Recent Developments

In 2024, HII has seen significant contract awards totaling $9.8 billion, including key contracts for the maintenance and overhaul of naval vessels. The company continues to invest in expanding its shipbuilding capacity, with capital expenditures projected to be approximately 1.0% to 1.5% of annual revenues for maintenance and sustainment, and 2.0% to 2.5% for discretionary expenditures.

Cash Flow and Liquidity

Cash provided by operating activities for the nine months ended September 30, 2024, was $2 million, a decrease from $408 million in 2023. The free cash flow for the same period was $(237) million, a decrease of $495 million from $258 million in 2023. The unfavorable change was primarily driven by higher capital expenditures and an unfavorable change in trade working capital.

HII’s financial strategy remains focused on optimizing its capital structure and maintaining sufficient liquidity to meet its obligations and fund future growth initiatives.

A Who Owns Huntington Ingalls Industries, Inc. (HII)

Major Shareholders

As of 2024, Huntington Ingalls Industries, Inc. (HII) has a diverse ownership structure, comprising institutional investors and individual shareholders. Key institutional shareholders include:

Insider Ownership

Insider ownership remains significant, reflecting management's confidence in the company. Notable insiders include:

Stock Performance and Market Capitalization

As of the end of September 2024, HII's stock price was approximately $262.99 per share, with a market capitalization of about $10.3 billion.

Recent Shareholder Actions

In January 2024, the board of directors approved an increase in the stock repurchase program to $3.8 billion, extending the term to December 31, 2028. This program aims to enhance shareholder value by returning capital through share buybacks.

Dividend Information

Huntington Ingalls Industries declared a dividend of $1.30 per share in September 2024, reflecting a commitment to providing returns to shareholders.

Ownership Summary

Overall, Huntington Ingalls Industries, Inc. exhibits a balanced ownership structure with a mix of institutional investors, insiders, and retail shareholders, fostering a stable governance environment.

Huntington Ingalls Industries, Inc. (HII) Mission Statement

Company Overview

Huntington Ingalls Industries, Inc. ("HII") is a global defense partner specializing in the design, construction, and maintenance of naval ships and technologies. The company operates primarily in three segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Mission Technologies. As of 2024, HII employs over 44,000 people and is recognized as America's largest shipbuilder.

Mission Statement

HII's mission is to build and deliver the world’s most powerful, survivable naval ships and technologies that safeguard America’s seas, sky, land, space, and cyber. The company is committed to providing innovative solutions that enhance national security and support U.S. defense objectives.

Financial Performance

For the nine months ended September 30, 2024, HII reported total sales and service revenues of $8.531 billion, an increase from $8.277 billion during the same period in 2023. The breakdown of revenues by segment is as follows:

Backlog and Contract Awards

As of September 30, 2024, HII's total backlog was reported at $49.4 billion, compared to $48.1 billion as of December 31, 2023. The backlog includes both funded and unfunded contracts, primarily from U.S. Government orders. The breakdown of backlog by segment is as follows:

Dividends and Shareholder Returns

HII declared dividends of $1.30 per share in Q3 2024, up from $1.24 per share in Q3 2023. The total dividends declared for the nine months ended September 30, 2024, amounted to $3.90 per share, compared to $3.72 per share for the same period in 2023.

Key Financial Metrics

The following table summarizes key financial metrics for HII as of September 30, 2024:

Operational Highlights

HII's operational focus includes enhancing capabilities in shipbuilding, naval nuclear support, and integrated technology solutions. The company continues to invest in innovation to meet the evolving needs of the U.S. Department of Defense and other federal agencies.

How Huntington Ingalls Industries, Inc. (HII) Works

Company Overview

Huntington Ingalls Industries, Inc. (HII) operates as a major player in the defense and shipbuilding industry, specializing in the design and construction of nuclear and non-nuclear ships for the U.S. Navy and other government entities. The company is divided into three primary segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Mission Technologies.

Financial Performance

For the nine months ended September 30, 2024, HII reported:

• Net earnings: $427 million compared to $407 million in 2023.
• Sales and service revenues: $8.531 billion, an increase of 3% from $8.277 billion in the same period of 2023.
• Operating income: $425 million, down from $469 million in the prior year.

Segment Results

The following table summarizes the sales and segment operating income for each segment for the three and nine months ended September 30, 2024, as compared to 2023:

Backlog of Orders

As of September 30, 2024, HII's total backlog was $49.4 billion, up from $48.1 billion at the end of 2023. The following table breaks down the backlog by segment:

Contract Awards

During the nine months ended September 30, 2024, HII secured new contract awards totaling $9.8 billion, which included notable contracts for:

• Maintenance and overhaul of USS Boise (SSN 764).
• Advanced planning contract for the RCOH of USS Harry S. Truman (CVN 75).
• Construction of USS Richard J. Danzig (DDG 143).

Cash Flow Analysis

For the nine months ended September 30, 2024, cash flow from operating activities was $2 million, significantly down from $408 million in 2023. Key components of cash flow are summarized in the following table:

Debt and Equity Position

As of September 30, 2024, HII reported total assets of $11.082 billion, down from $11.215 billion at the end of 2023. The company’s liabilities totaled $6.879 billion, leading to stockholders' equity of $4.203 billion.

Dividends

In 2024, HII declared dividends of $1.30 per share, which is an increase from $1.24 per share in 2023.

Effective Income Tax Rate

The effective income tax rates for the three months ended September 30, 2024, were 9.8%, significantly lower than 21.7% for the same period in 2023, attributed to research and development tax credits.

The effective tax rates for the nine months ended September 30, 2024, were 16.6%, down from 21.9% in 2023.

How Huntington Ingalls Industries, Inc. (HII) Makes Money

Revenue Segments

Huntington Ingalls Industries (HII) generates revenue primarily through three segments: Ingalls Shipbuilding, Newport News Shipbuilding, and Mission Technologies. The following table summarizes the sales and service revenues for these segments for the three and nine months ended September 30, 2024, compared to the same periods in 2023.

Operating Income

The operating income for HII's segments for the same periods is shown in the table below:

Contract Awards

During the nine months ended September 30, 2024, HII received new contract awards totaling $9.8 billion. Key awards included:

• Maintenance and overhaul of USS Boise (SSN 764)
• Advanced planning contract for the RCOH of USS Harry S. Truman (CVN 75)
• Construction of USS Richard J. Danzig (DDG 143)

Backlog

The total backlog for HII as of September 30, 2024, was $49.4 billion, an increase from $48.1 billion at the end of 2023. The backlog includes both funded and unfunded contracts:

Cash Flow from Operations

For the nine months ended September 30, 2024, HII reported net cash provided by operating activities of $2 million, a significant decline from $408 million in the same period in 2023. The operating cash flow was affected by changes in trade working capital:

Effective Income Tax Rates

HII's effective income tax rates on earnings from operations for the three months ended September 30, 2024, were 9.8%, compared to 21.7% for the same period in 2023. The effective tax rates for the nine-month period were 16.6% in 2024 compared to 21.9% in 2023.

Dividend Payments

For the nine months ended September 30, 2024, HII declared dividends of $3.90 per share, an increase from $3.72 per share in the same period of 2023.

Conclusion on Financial Performance

Huntington Ingalls Industries continues to leverage its diversified segments to generate significant revenue and maintain a robust backlog, indicating strong future earnings potential.

Article updated on 8 Nov 2024

Resources:

• Huntington Ingalls Industries, Inc. (HII) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Huntington Ingalls Industries, Inc. (HII)' financial performance, including balance sheets, income statements, and cash flow statements.
• SEC Filings – View Huntington Ingalls Industries, Inc. (HII)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.