HII Reports Second Quarter 2025 Results
HII (NYSE: HII) reported Q2 2025 results with revenues of $3.1 billion, up 3.5% year-over-year. Net earnings were $152 million with diluted EPS of $3.86, compared to $173 million and $4.38 in Q2 2024.
The company secured new contract awards of $11.9 billion, achieving a record backlog of $56.9 billion. Operating margin decreased to 5.3% from 6.3% year-over-year. Notable developments include a strategic partnership with C3 AI for digital technologies and AI implementation in shipbuilding.
HII reaffirmed its FY25 guidance, with shipbuilding revenue expected between $8.9-$9.1 billion and Mission Technologies revenue projected at $2.9-$3.1 billion. The company increased its FY25 free cash flow guidance to $500-$600 million.
HII (NYSE: HII) ha riportato i risultati del secondo trimestre 2025 con ricavi pari a 3,1 miliardi di dollari, in crescita del 3,5% rispetto all'anno precedente. L'utile netto è stato di 152 milioni di dollari con un utile per azione diluito di 3,86 dollari, rispetto ai 173 milioni e 4,38 dollari del secondo trimestre 2024.
L'azienda ha ottenuto nuovi contratti per 11,9 miliardi di dollari, raggiungendo un backlog record di 56,9 miliardi di dollari. Il margine operativo è sceso al 5,3% rispetto al 6,3% dell'anno precedente. Tra gli sviluppi rilevanti vi è una partnership strategica con C3 AI per le tecnologie digitali e l'implementazione dell'intelligenza artificiale nella costruzione navale.
HII ha confermato le previsioni per l'intero anno fiscale 2025, con ricavi dalla costruzione navale attesi tra 8,9 e 9,1 miliardi di dollari e ricavi da Mission Technologies stimati tra 2,9 e 3,1 miliardi di dollari. L'azienda ha inoltre aumentato la previsione del flusso di cassa libero per il 2025 a 500-600 milioni di dollari.
HII (NYSE: HII) informó los resultados del segundo trimestre de 2025 con ingresos de 3.1 mil millones de dólares, un aumento del 3.5% interanual. Las ganancias netas fueron de 152 millones de dólares con un BPA diluido de 3.86 dólares, en comparación con 173 millones y 4.38 dólares en el segundo trimestre de 2024.
La compañía aseguró nuevos contratos por 11.9 mil millones de dólares, alcanzando un récord de cartera de pedidos de 56.9 mil millones de dólares. El margen operativo disminuyó a 5.3% desde 6.3% año tras año. Entre los desarrollos destacados se encuentra una alianza estratégica con C3 AI para tecnologías digitales e implementación de IA en la construcción naval.
HII reafirmó su guía para el año fiscal 2025, con ingresos por construcción naval esperados entre 8.9 y 9.1 mil millones de dólares y ingresos de Mission Technologies proyectados entre 2.9 y 3.1 mil millones de dólares. La compañía aumentó su guía de flujo de caja libre para 2025 a 500-600 millones de dólares.
HII (NYSE: HII)� 2025� 2분기 실적� 발표하며 매출액이 31� 달러� 전년 동기 대� 3.5% 증가했습니다. 순이익은 1� 5,200� 달러, 희석 주당순이�(EPS)은 3.86달러�, 2024� 2분기 1� 7,300� 달러와 4.38달러� 비해 감소했습니다.
사� 119� 달러 규모� 신규 계약� 확보하며, 569� 달러� 기록적인 수주 잔고� 달성했습니다. 영업이익률은 전년 동기 대� 6.3%에서 5.3%� 하락했습니다. 주요 발전 사항으로� 조선 분야� 디지� 기술� 인공지� 도입� 위한 C3 AI와� 전략� 파트너십� 포함됩니�.
HII� 2025 회계연도 가이던스를 재확인했으며, 조선 매출은 89억~91� 달러, Mission Technologies 매출은 29억~31� 달러� 예상됩니�. 또한, 2025 회계연도 자유 현금 흐름 가이던스를 5억~6� 달러� 상향 조정했습니다.
HII (NYSE : HII) a annoncé ses résultats du deuxième trimestre 2025 avec un chiffre d'affaires de 3,1 milliards de dollars, en hausse de 3,5 % par rapport à l'année précédente. Le bénéfice net s'est élevé à 152 millions de dollars avec un BPA dilué de 3,86 dollars, contre 173 millions et 4,38 dollars au deuxième trimestre 2024.
L'entreprise a obtenu de nouveaux contrats pour un montant de 11,9 milliards de dollars, atteignant un carnet de commandes record de 56,9 milliards de dollars. La marge d'exploitation a diminué à 5,3 % contre 6,3 % l'année précédente. Parmi les développements notables figure un partenariat stratégique avec C3 AI pour les technologies numériques et la mise en œuvre de l'intelligence artificielle dans la construction navale.
HII a réaffirmé ses prévisions pour l'exercice 2025, avec un chiffre d'affaires attendu dans la construction navale compris entre 8,9 et 9,1 milliards de dollars et un chiffre d'affaires de Mission Technologies projeté entre 2,9 et 3,1 milliards de dollars. L'entreprise a augmenté ses prévisions de flux de trésorerie disponible pour 2025 à 500-600 millions de dollars.
HII (NYSE: HII) meldete die Ergebnisse für das zweite Quartal 2025 mit einem Umsatz von 3,1 Milliarden US-Dollar, was einem Anstieg von 3,5 % im Jahresvergleich entspricht. Der Nettogewinn betrug 152 Millionen US-Dollar bei einem verwässerten Ergebnis je Aktie (EPS) von 3,86 US-Dollar, verglichen mit 173 Millionen und 4,38 US-Dollar im zweiten Quartal 2024.
Das Unternehmen sicherte sich neue Vertragsabschlüsse in Höhe von 11,9 Milliarden US-Dollar und erreichte einen Rekordauftragsbestand von 56,9 Milliarden US-Dollar. Die operative Marge sank von 6,3 % auf 5,3 % im Jahresvergleich. Bedeutende Entwicklungen umfassen eine strategische Partnerschaft mit C3 AI zur digitalen Technologie und KI-Implementierung im Schiffbau.
HII bestätigte seine Prognose für das Geschäftsjahr 2025, mit erwarteten Umsätzen im Schiffbau zwischen 8,9 und 9,1 Milliarden US-Dollar und einem erwarteten Umsatz im Bereich Mission Technologies von 2,9 bis 3,1 Milliarden US-Dollar. Das Unternehmen erhöhte seine Prognose für den freien Cashflow im Geschäftsjahr 2025 auf 500 bis 600 Millionen US-Dollar.
- Record backlog of $56.9B from $11.9B in new contract awards
- Revenue growth of 3.5% year-over-year to $3.1B
- Strong free cash flow of $730M compared to -$99M in Q2 2024
- Strategic partnership with C3 AI to implement AI in shipbuilding
- Secured contract for two additional Block V Virginia-class submarines
- Operating margin declined to 5.3% from 6.3% year-over-year
- Net earnings decreased 12.1% to $152M from $173M in Q2 2024
- Diluted EPS dropped 11.9% to $3.86 from $4.38 year-over-year
- Lower performance in Virginia-class submarine program and aircraft carrier construction
- Segment operating income decreased 15.3% to $172M from $203M
Insights
HII reports mixed Q2 results with declining margins despite revenue growth; record $56.9B backlog provides long-term stability.
HII delivered $3.1 billion in Q2 2025 revenue, representing a
The standout positive is HII's remarkable
Newport News Shipbuilding, HII's largest division, showed concerning performance trends with operating margin dropping sharply to
Management's commentary about "steady progress on operational initiatives" and "early signs that targeted investments are helping to stabilize the workforce and supply chain" suggests they're addressing these challenges, but haven't yet reversed the negative margin trend. The strategic partnership with C3 AI to implement artificial intelligence in shipbuilding processes represents a forward-looking attempt to improve operational efficiency.
Ingalls Shipbuilding maintained relatively stable performance with a
NEWPORT NEWS, Va., July 31, 2025 (GLOBE NEWSWIRE) -- HII (NYSE: HII) today reported results for the second quarter of fiscal 2025.
Highlights
- Second quarter revenues were
$3.1 billion - Second quarter net earnings were
$152 million or$3.86 diluted earnings per share - New contract awards of
$11.9 billion , resulting in record backlog of$56.9 billion - Entered into a strategic partnership with C3 AI to expand our use of digital technologies and apply artificial intelligence to accelerate shipbuilding throughput
- Reaffirming FY25 segment revenue and operating margin guidance1
Second Quarter Results
Second quarter 2025 revenues of
Operating income in the second quarter of 2025 was
Segment operating income2 in the second quarter of 2025 was
Net earnings in the quarter were
Net cash provided by operating activities in the quarter was
New contract awards in the second quarter of 2025 were
“Second quarter results were largely in line with our expectations as we continue to make steady progress on our operational initiatives for 2025. We have seen early signs that targeted investments are helping to stabilize the workforce and supply chain, in support of the broader maritime industrial base," said Chris Kastner, HII’s president and CEO.
1The financial outlook, expectations and other forward looking statements provided by the company for 2025 and beyond reflect the company's judgment based on information available at the time of this release. Please see the "Forward-looking Statements" section in this release and our Form 10-Q for factors that may impact the company's ability to meet expectations.
2Non-GAAP measures. See Exhibit B for definitions and reconciliations.
Results of Operations
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
June 30 | June 30 | |||||||||||||||||||||||||||||
($ in millions, except per share amounts) | 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||
Sales and service revenues | $ | 3,082 | $ | 2,977 | $ | 105 | $ | 5,816 | $ | 5,782 | $ | 34 | ||||||||||||||||||
Operating income | 163 | 189 | (26 | ) | (13.8)% | 324 | 343 | (19 | ) | (5.5)% | ||||||||||||||||||||
Operating margin % | 5.3 | % | 6.3 | % | (106) bps | 5.6 | % | 5.9 | % | (36) bps | ||||||||||||||||||||
Segment operating income1 | 172 | 203 | (31 | ) | (15.3)% | 343 | 373 | (30 | ) | (8.0)% | ||||||||||||||||||||
Segment operating margin %1 | 5.6 | % | 6.8 | % | (124) bps | 5.9 | % | 6.5 | % | (55) bps | ||||||||||||||||||||
Net earnings | 152 | 173 | (21 | ) | (12.1)% | 301 | 326 | (25 | ) | (7.7)% | ||||||||||||||||||||
Diluted earnings per share | $ | 3.86 | $ | 4.38 | $ | (0.52 | ) | (11.9)% | $ | 7.66 | $ | 8.25 | $ | (0.59 | ) | (7.2)% | ||||||||||||||
1 Non-GAAP measures that exclude non-segment factors affecting operating income. See Exhibit B for definitions and reconciliations. | ||||||||||||||||||||||||||||||
Segment Operating Results
Ingalls Shipbuilding
Three Months Ended | Six Months Ended | ||||||||||||||||||||||||||||
June 30 | June 30 | ||||||||||||||||||||||||||||
($ in millions) | 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | |||||||||||||||||||||
Revenues | $ | 724 | $ | 712 | $ | 12 | $ | 1,361 | $ | 1,367 | $ | (6 | ) | (0.4)% | |||||||||||||||
Segment operating income | 54 | 56 | (2 | ) | (3.6)% | 100 | 116 | (16 | ) | (13.8)% | |||||||||||||||||||
Segment operating margin % | 7.5 | % | 7.9 | % | (41) bps | 7.3 | % | 8.5 | % | (114) bps | |||||||||||||||||||
Ingalls Shipbuilding revenues for the second quarter of 2025 were
Ingalls Shipbuilding segment operating income for the second quarter of 2025 was
Key Ingalls Shipbuilding milestones for the quarter:
- Christened guided missile destroyer Jeremiah Denton (DDG 129)
- Signed MOU with HD Hyundai Heavy Industries to explore opportunities to collaborate on accelerating ship production
Newport News Shipbuilding
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||
June 30 | June 30 | |||||||||||||||||||||||||||||
($ in millions) | 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||||
Revenues | $ | 1,603 | $ | 1,535 | $ | 68 | 4.4 | % | $ | 2,999 | $ | 2,969 | $ | 30 | 1.0 | % | ||||||||||||||
Segment operating income | 82 | 111 | (29 | ) | (26.1)% | 167 | 193 | (26 | ) | (13.5)% | ||||||||||||||||||||
Segment operating margin % | 5.1 | % | 7.2 | % | (212) bps | 5.6 | % | 6.5 | % | (93) bps | ||||||||||||||||||||
Newport News Shipbuilding revenues for the second quarter of 2025 were
Newport News Shipbuilding segment operating income for the second quarter of 2025 was
adjustments and incentives on the aircraft carrier RCOH program.
Key Newport News Shipbuilding milestones for the quarter:
- Awarded contract modification for construction of two additional Block V Virginia-class submarines
- Launched Virginia-class submarine Arkansas (SSN 800)
- Celebrated first meal aboard Virginia-class submarine Massachusetts (SSN 798)
Mission Technologies
Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||
June 30 | June 30 | |||||||||||||||||||||||||||
($ in millions) | 2025 | 2024 | $ Change | % Change | 2025 | 2024 | $ Change | % Change | ||||||||||||||||||||
Revenues | $ | 791 | $ | 765 | $ | 26 | 3.4 | % | $ | 1,526 | $ | 1,515 | $ | 11 | 0.7 | % | ||||||||||||
Segment operating income | 36 | 36 | � | � | % | 76 | 64 | 12 | 18.8 | % | ||||||||||||||||||
Segment operating margin % | 4.6 | % | 4.7 | % | (15) bps | 5.0 | % | 4.2 | % | 76 bps | ||||||||||||||||||
Mission Technologies revenues for the second quarter of 2025 were
Mission Technologies segment operating income for the second quarter of 2025 was
Mission Technologies results included approximately
Mission Technologies EBITDA margin1 in the second quarter of 2025 was
Key Mission Technologies milestones for the quarter:
- Received multiple award contract to provide live training solutions to the U.S. Army’s Program Executive Office for Simulation, Training and Instrumentation
- Delivered initial Lionfish small uncrewed undersea vehicles (SUUVs) to the U.S. Navy under multi-year program
- Announced the order of more than a dozen REMUS 300 SUUVs by Hitachi
- Achieved a successful forward-deployed launch and recovery of the Yellow Moray uncrewed undersea vehicle (UUV), a variant of the REMUS 600, from the HII-built USS Delaware (SSN 791), a Virginia-class submarine
1Non-GAAP measures. See Exhibit B for definitions and reconciliations. |
HII Financial Outlook1
- Reaffirming FY25 segment revenue and operating margin guidance
- FY25 shipbuilding revenue between
$8.9 and$9.1 billion ; expect shipbuilding operating margin2 between5.5% and6.5% - FY25 Mission Technologies revenue between
$2.9 t o$3.1 billion , Mission Technologies segment operating margin between4.0% and4.5% ; and Mission Technologies EBITDA margin2 between8.0% and8.5%
- FY25 shipbuilding revenue between
- Increasing FY25 free cash flow2 guidance to between
$500 and$600 million
FY25 Outlook1 | ||
Shipbuilding Revenue | ||
Shipbuilding Operating Margin2 | ||
Mission Technologies Revenue | ||
Mission Technologies Segment Operating Margin | ||
Mission Technologies EBITDA Margin2 | ||
Operating FAS/CAS Adjustment | ( | |
Non-current State Income Tax Expense3 | ( | |
Interest Expense | ( | |
Non-operating Retirement Benefit | ||
Effective Tax Rate | ~ | |
Depreciation & Amortization | ~ | |
Capital Expenditures | ~ | |
Free Cash Flow2 | ||
1The financial outlook, expectations and other forward-looking statements provided by the company for 2025 and beyond reflect the company's judgment based on the information available at the time of this release. Please see the "Forward-looking Statements" section in this release and our Form 10-Q for factors that may impact the company's ability to meet expectations. | ||
2Non-GAAP measures. See Exhibit B for definitions. In reliance upon Item 10(e)(1)(i)(B) of Regulation S-K, reconciliations of forward–looking GAAP and non–GAAP measures are not provided because of the unreasonable effort associated with providing such reconciliations due to the variability in the occurrence and the amounts of certain components of GAAP and non-GAAP measures. For the same reasons, we are unable to address the significance of the unavailable information, which could be material to future results. | ||
3 Outlook is based on current tax law. Variability exists based on how and when individual states conform to recent federal tax law changes. | ||
About HII
HII is a global, all-domain defense provider. HII’s mission is to deliver the world’s most powerful ships and all-domain solutions in service of the nation, creating the advantage for our customers to protect peace and freedom around the world.
As the nation’s largest military shipbuilder, and with a more than 135-year history of advancing U.S. national security, HII delivers critical capabilities extending from ships to unmanned systems, cyber, ISR, AI/ML and synthetic training. Headquartered in Virginia, HII’s workforce is 44,000 strong. For more information, please visit www.HII.com.
Conference Call Information
HII will webcast its earnings conference call at 9 a.m. Eastern time today. A live audio broadcast of the conference call and supplemental presentation will be available on the investor relations page of the company’s website: www.HII.com. A telephone replay of the conference call will be available from noon today through Thursday, August 7th by calling (866) 813-9403 or (929) 458-6194 and using access code 808356.
Cautionary Statement Regarding Forward-Looking Statements and Projections
Statements in this earnings release and in our other filings with the SEC, as well as other statements we may make from time to time, other than statements of historical fact, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance," "outlook," "predicts," "potential," "continue," and similar words or phrases or the negative of these words or phrases. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable when made, we cannot guarantee future results, levels of activity, performance, or achievements. There are a number of important factors that could cause our actual results to differ materially from the results anticipated by our forward-looking statements, which include, but are not limited to: our dependence on the U.S. Government for substantially all of our business; significant delays or reductions in appropriations for our programs and/or changes in customer priorities and requirements (including government budgetary constraints, shifts in defense spending, and changes in customer short-range and long-range plans);our ability to estimate our future contract costs, including cost increases due to inflation, labor challenges, changes in trade policy, or other factors and our efforts to recover or offset such costs and/or changes in estimated contract costs, and perform our contracts effectively; changes in business practices, procurement processes and government regulations and our ability to comply with such requirements; adverse economic conditions in the United States and globally; our level of indebtedness and ability to service our indebtedness; our ability to deliver our products and services at an affordable life cycle cost and compete within our markets; our ability to attract, retain, and train a qualified workforce; subcontractor and supplier performance and the availability and pricing of raw materials and components; our ability to execute our strategic plan, including with respect to share repurchases, dividends, capital expenditures, and strategic acquisitions; investigations, claims, disputes, enforcement actions, litigation (including criminal, civil, and administrative), and/or other legal proceedings, and improper conduct of employees, agents, subcontractors, suppliers, business partners, or joint ventures in which we participate, including the impact on our reputation or ability to do business; changes in key estimates and assumptions regarding our pension and retiree health care costs; security threats, including cyber security threats, and related disruptions; natural and environmental disasters and political instability; health epidemics, pandemics and similar outbreaks; and other risk factors discussed herein and in our other filings with the SEC. There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business, and we undertake no obligation to update or revise any forward-looking statements. You should not place undue reliance on any forward-looking statements that we may make.
This release also contains non-GAAP financial measures and includes a GAAP reconciliation of these financial measures. Non-GAAP financial measures should not be construed as being more important than comparable GAAP measures.
Exhibit A: Financial Statements
HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
Three Months Ended June 30 | Six Months Ended June 30 | |||||||||||||||
(in millions, except per share amounts) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
Sales and service revenues | ||||||||||||||||
Product sales | $ | 1,957 | $ | 1,926 | $ | 3,670 | $ | 3,713 | ||||||||
Service revenues | 1,125 | 1,051 | 2,146 | 2,069 | ||||||||||||
Sales and service revenues | 3,082 | 2,977 | 5,816 | 5,782 | ||||||||||||
Cost of sales and service revenues | ||||||||||||||||
Cost of product sales | 1,696 | 1,627 | 3,147 | 3,164 | ||||||||||||
Cost of service revenues | 991 | 918 | 1,880 | 1,811 | ||||||||||||
Income from operating investments, net | 8 | 11 | 21 | 23 | ||||||||||||
Other income and gains (losses), net | 1 | 1 | 1 | � | ||||||||||||
General and administrative expenses | 241 | 255 | 487 | 487 | ||||||||||||
Operating income | 163 | 189 | 324 | 343 | ||||||||||||
Other income (expense) | ||||||||||||||||
Interest expense | (28 | ) | (24 | ) | (56 | ) | (45 | ) | ||||||||
Non-operating retirement benefit | 47 | 46 | 95 | 90 | ||||||||||||
Other, net | 6 | 5 | 12 | 12 | ||||||||||||
Earnings before income taxes | 188 | 216 | 375 | 400 | ||||||||||||
Federal and foreign income tax expense | 36 | 43 | 74 | 74 | ||||||||||||
Net earnings | $ | 152 | $ | 173 | $ | 301 | $ | 326 | ||||||||
Basic earnings per share | $ | 3.86 | $ | 4.38 | $ | 7.66 | $ | 8.25 | ||||||||
Weighted-average common shares outstanding | 39.4 | 39.5 | 39.3 | 39.5 | ||||||||||||
Diluted earnings per share | $ | 3.86 | $ | 4.38 | $ | 7.66 | $ | 8.25 | ||||||||
Weighted-average diluted shares outstanding | 39.4 | 39.5 | 39.3 | 39.5 | ||||||||||||
Dividends declared per share | $ | 1.35 | $ | 1.30 | $ | 2.70 | $ | 2.60 | ||||||||
Net earnings from above | $ | 152 | $ | 173 | $ | 301 | $ | 326 | ||||||||
Other comprehensive income | ||||||||||||||||
Change in unamortized benefit plan costs | 1 | 4 | 2 | 9 | ||||||||||||
Tax expense for items of other comprehensive income | � | � | � | (2 | ) | |||||||||||
Other comprehensive income, net of tax | 1 | 4 | 2 | 7 | ||||||||||||
Comprehensive income | $ | 153 | $ | 177 | $ | 303 | $ | 333 | ||||||||
HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
($ in millions) | June 30, 2025 | December 31, 2024 | ||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 343 | $ | 831 | ||||
Accounts receivable, net of allowance for expected credit losses of | 377 | 212 | ||||||
Contract assets | 1,811 | 1,683 | ||||||
Inventoried costs | 215 | 208 | ||||||
Income taxes receivable | 153 | 204 | ||||||
Prepaid expenses and other current assets | 74 | 90 | ||||||
Total current assets | 2,973 | 3,228 | ||||||
Property, Plant, and Equipment, net of accumulated depreciation of | 3,576 | 3,450 | ||||||
Operating lease assets | 242 | 239 | ||||||
Goodwill | 2,651 | 2,618 | ||||||
Other intangible assets, net of accumulated amortization of | 746 | 782 | ||||||
Pension plan assets | 1,492 | 1,422 | ||||||
Miscellaneous other assets | 418 | 402 | ||||||
Total assets | $ | 12,098 | $ | 12,141 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current Liabilities | ||||||||
Trade accounts payable | 650 | 598 | ||||||
Accrued employees� compensation | 384 | 392 | ||||||
Short-term debt and current portion of long-term debt | 3 | 503 | ||||||
Current portion of postretirement plan liabilities | 124 | 124 | ||||||
Current portion of workers� compensation liabilities | 203 | 201 | ||||||
Contract liabilities | 969 | 774 | ||||||
Other current liabilities | 417 | 399 | ||||||
Total current liabilities | 2,750 | 2,991 | ||||||
Long-term debt | 2,700 | 2,700 | ||||||
Pension plan liabilities | 142 | 142 | ||||||
Other postretirement plan liabilities | 199 | 209 | ||||||
Workers� compensation liabilities | 449 | 443 | ||||||
Long-term operating lease liabilities | 206 | 205 | ||||||
Deferred tax liabilities | 359 | 378 | ||||||
Other long-term liabilities | 411 | 407 | ||||||
Total liabilities | 7,216 | 7,475 | ||||||
Commitments and Contingencies | ||||||||
Stockholders� Equity | ||||||||
Common stock, | 1 | 1 | ||||||
Additional paid-in capital | 2,066 | 2,045 | ||||||
Retained earnings | 5,290 | 5,097 | ||||||
Treasury stock | (2,449 | ) | (2,449 | ) | ||||
Accumulated other comprehensive loss | (26 | ) | (28 | ) | ||||
Total stockholders� equity | 4,882 | 4,666 | ||||||
Total liabilities and stockholders� equity | $ | 12,098 | $ | 12,141 | ||||
HUNTINGTON INGALLS INDUSTRIES, INC.CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Six Months Ended June 30 | |||||||
($ in millions) | 2025 | 2024 | |||||
Operating Activities | |||||||
Net earnings | $ | 301 | $ | 326 | |||
Adjustments to reconcile net cash provided by (used in) operating activities: | |||||||
Depreciation | 110 | 106 | |||||
Amortization of purchased intangibles | 52 | 54 | |||||
Stock-based compensation | 33 | 7 | |||||
Deferred income taxes | (19 | ) | (28 | ) | |||
Gain on investments in marketable securities | (10 | ) | (11 | ) | |||
Other non-cash transactions, net | 9 | 2 | |||||
Change in | |||||||
Accounts receivable | (165 | ) | (239 | ) | |||
Contract assets | (128 | ) | (157 | ) | |||
Inventoried costs | (7 | ) | (12 | ) | |||
Prepaid expenses and other assets | 57 | (38 | ) | ||||
Accounts payable and accruals | 272 | (164 | ) | ||||
Retiree benefits | (77 | ) | (57 | ) | |||
Net cash provided by (used in) operating activities | 428 | (211 | ) | ||||
Investing Activities: | |||||||
Capital expenditures | |||||||
Capital expenditure additions | (163 | ) | (165 | ) | |||
Grant proceeds for capital expenditures | 3 | 3 | |||||
Acquisitions of businesses | (133 | ) | � | ||||
Other investing activities, net | 2 | � | |||||
Net cash used in investing activities | (291 | ) | (162 | ) | |||
Financing Activities: | |||||||
Repayment of long-term debt | (500 | ) | (229 | ) | |||
Proceeds from revolving credit facility borrowings | � | 42 | |||||
Repayment of revolving credit facility borrowings | � | (42 | ) | ||||
Net borrowings on commercial paper | � | 440 | |||||
Dividends paid | (106 | ) | (102 | ) | |||
Repurchases of common stock | � | (127 | ) | ||||
Employee taxes on certain share-based payment arrangements | (14 | ) | (25 | ) | |||
Other financing activities, net | (5 | ) | (3 | ) | |||
Net cash used in financing activities | (625 | ) | (46 | ) | |||
Change in cash and cash equivalents | (488 | ) | (419 | ) | |||
Cash and cash equivalents, beginning of period | 831 | 430 | |||||
Cash and cash equivalents, end of period | $ | 343 | $ | 11 | |||
Supplemental Cash Flow Disclosure | |||||||
Cash paid for income taxes (net of refunds) | $ | 55 | $ | 157 | |||
Cash paid for interest | $ | 42 | $ | 51 | |||
Non-Cash Investing and Financing Activities | |||||||
Capital expenditures accrued in accounts payable | $ | 6 | $ | 9 | |||
Exhibit B: Non-GAAP Measures Definitions & Reconciliations
This earnings release contains non-GAAP (accounting principles generally accepted in the United States of America) financial measures as defined by SEC Regulation G and indicated by a footnote in the text of this release. Definitions for the non-GAAP measures, and related reconciliations, are provided below. Because not all companies use identical definitions or calculations, our presentation of these measures may not be comparable to similarly titled measures of other companies.
Segment Operating Income and Segment Operating Margin We internally manage our operations by reference to segment operating income and segment operating margin and use these measures to evaluate our core operating performance. We believe that segment operating income and segment operating margin reflect additional ways of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These measures should be considered in addition to, and not as alternatives for, operating income and operating margin or any other performance measure presented in accordance with GAAP.
Segment operating income is defined as operating income for the relevant segment(s) before the Operating FAS/CAS Adjustment and non-current state income taxes.
Segment operating margin is defined as segment operating income as a percentage of sales and service revenues.
Shipbuilding operating margin, Mission Technologies EBITDA and Mission Technologies EBITDA margin. We use shipbuilding operating margin, Mission Technologies EBITDA and Mission Technologies EBITDA margin to evaluate our core operating performance. We believe these measures reflect additional ways of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These measures should be considered in addition to, and not as alternatives for, operating income and operating margin or any other performance measure presented in accordance with GAAP.
Shipbuilding operating margin is defined as the combined segment operating income of our Newport News Shipbuilding segment and Ingalls Shipbuilding segment as a percentage of shipbuilding revenue. Shipbuilding revenue is the sum of revenues of our Newport News Shipbuilding segment and Ingalls Shipbuilding segment.
Mission Technologies EBITDA is defined as Mission Technologies segment operating income before interest expense, income taxes, depreciation, and amortization.
Mission Technologies EBITDA margin is defined as Mission Technologies EBITDA as a percentage of Mission Technologies revenues.
Free Cash Flow. We use free cash flow as a key operating metric in assessing the performance of our business and as a key performance measure in evaluating management performance and determining incentive compensation. We believe free cash flow is an important measure that may be useful to investors and other users of our financial statements because it provides insight into our current and period-to-period performance and our ability to generate cash from continuing operations. Free cash flow has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, net income as a measure of our performance or net cash provided by operating activities as a measure of our liquidity.
Free cash flow is defined as net cash provided by (used in) operating activities less capital expenditures net of related grant proceeds.
In reliance upon Item 10(e)(1)(i)(B) of Regulation S-K, reconciliations of forward-looking GAAP and non-GAAP measures are not provided because of the unreasonable effort associated with providing such reconciliations due to the variability in the occurrence and the amounts of certain components of GAAP and non-GAAP measures. For the same reasons, we are unable to address the significance of the unavailable information, which could be material to future results.
Reconciliations of Segment Operating Income and Segment Operating Margin
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
($ in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
Ingalls revenues | $ | 724 | $ | 712 | $ | 1,361 | $ | 1,367 | ||||||||
Newport News revenues | 1,603 | 1,535 | 2,999 | 2,969 | ||||||||||||
Mission Technologies revenues | 791 | 765 | 1,526 | 1,515 | ||||||||||||
Intersegment eliminations | (36 | ) | (35 | ) | (70 | ) | (69 | ) | ||||||||
Sales and Service Revenues | 3,082 | 2,977 | 5,816 | 5,782 | ||||||||||||
Operating Income | 163 | 189 | 324 | 343 | ||||||||||||
Operating FAS/CAS Adjustment | 6 | 15 | 16 | 32 | ||||||||||||
Non-current state income taxes | 3 | (1 | ) | 3 | (2 | ) | ||||||||||
Segment Operating Income | 172 | 203 | 343 | 373 | ||||||||||||
As a percentage of sales and service revenues | 5.6 | % | 6.8 | % | 5.9 | % | 6.5 | % | ||||||||
Ingalls segment operating income | 54 | 56 | 100 | 116 | ||||||||||||
As a percentage of Ingalls revenues | 7.5 | % | 7.9 | % | 7.3 | % | 8.5 | % | ||||||||
Newport News segment operating income | 82 | 111 | 167 | 193 | ||||||||||||
As a percentage of Newport News revenues | 5.1 | % | 7.2 | % | 5.6 | % | 6.5 | % | ||||||||
Mission Technologies segment operating income | 36 | 36 | 76 | 64 | ||||||||||||
As a percentage of Mission Technologies revenues | 4.6 | % | 4.7 | % | 5.0 | % | 4.2 | % | ||||||||
Reconciliation of Free Cash Flow
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
($ in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
Net cash provided by (used in) operating activities | $ | 823 | $ | (9 | ) | $ | 428 | $ | (211 | ) | ||||||
Less capital expenditures: | ||||||||||||||||
Capital expenditure additions | (96 | ) | (90 | ) | (163 | ) | (165 | ) | ||||||||
Grant proceeds for capital expenditures | 3 | � | 3 | 3 | ||||||||||||
Free cash flow | $ | 730 | $ | (99 | ) | $ | 268 | $ | (373 | ) | ||||||
Reconciliation of Mission Technologies EBITDA and EBITDA Margin
Three Months Ended | Six Months Ended | |||||||||||||||
June 30 | June 30 | |||||||||||||||
($ in millions) | 2025 | 2024 | 2025 | 2024 | ||||||||||||
Mission Technologies sales and service revenues | $ | 791 | $ | 765 | $ | 1,526 | $ | 1,515 | ||||||||
Mission Technologies segment operating income | $ | 36 | $ | 36 | $ | 76 | $ | 64 | ||||||||
Mission Technologies depreciation expense | 3 | 2 | 6 | 5 | ||||||||||||
Mission Technologies amortization expense | 23 | 25 | 45 | 50 | ||||||||||||
Mission Technologies state tax expense | 2 | 2 | 4 | 4 | ||||||||||||
Mission Technologies EBITDA | $ | 64 | $ | 65 | $ | 131 | $ | 123 | ||||||||
Mission Technologies EBITDA margin | 8.1 | % | 8.5 | % | 8.6 | % | 8.1 | % | ||||||||
Contacts: Brooke Hart (Media) [email protected] 202-264-7108 | Christie Thomas (Investors) [email protected] 757-380-2104 |
