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Huntington Ingalls Wins Contract to Support Aircraft Carrier
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Huntington Ingalls Industries, Inc.’s (HII - Free Report) Newport News business unit recently secured a modification contract involving the Nimitz (CVN 68) Class aircraft carrier. The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Details of the Deal
Valued at $18.4 million, the contract is projected to be completed by November 2024. Per the terms of the deal, Huntington Ingalls will procure additional support to conduct pre-advanced planning for Nimitz (CVN 68) Class aircraft carrier defueling and inactivation.
Work related to this deal will be carried out in Newport News, VA.
HII’s Position in U.S. Naval Defense
An aircraft carrier plays a critical role in a nation’s ability to effectively command, control and coordinate its naval operations, thereby protecting its onshore territory. With the United States being a stalwart in the global defense map, its naval power has been a formidable one. Huntington Ingalls, being America’s sole designer and builder of nuclear-powered aircraft carriers, enjoys a dominating presence in the U.S. naval defense market.
Notably, the company’s Newport News unit has designed and built more than 31 aircraft carriers for the U.S. Navy since 1933, including all 10 Nimitz class (CVN 68) aircraft carriers currently in active service, as well as the first ship of the next-generation Gerald R. Ford class (CVN 78) aircraft carriers. This business division also engages in refueling and overhaul and the inactivation of nuclear-powered aircraft carriers.
To further strengthen its position in the U.S. naval defense space, HII is currently designing and building the next generation of aircraft carriers – the Gerald R. Ford-class aircraft carrier. With new software-controlled electromagnetic catapults and weapons elevators, a redesigned flight deck and island, and more than twice the electrical capacity of the preceding class, these aircraft carriers are truly designed for the 21st century and beyond.
With the experience of more than 135 years in building naval ships and aircraft carriers, Huntington Ingalls bears the tradition of clinching a steady flow of orders like the latest one, which in turn boosts its revenue generation prospects. Its revenues increased 6.8% year over year in the second quarter of 2024.
Will HII’s Growth be Sustainable?
With increasing geopolitical issues and territorial disputes in recent times, nations across the globe are fortifying their naval capacity. This has led to augmented spending on naval ships, including aircraft carriers, for enhanced sea warfare capabilities, thereby bolstering the growth prospects of the naval shipbuilding market.
Mordor Intelligence projects the global naval shipbuilding market to witness a CAGR of 6.5% in the 2024-2029 time period.
Such market projections are likely to benefit Huntington Ingalls, America’s largest shipbuilder and the nation’s sole builder of amphibious assault ships.
Notably, the Zacks Consensus Estimate for HII’s long-term (three-to five-years) earnings growth rate is pegged at 6.9%. The sales estimate for the company implies a year-over-year improvement of 2.6% and 3.8% in 2024 and 2025, respectively. Such upbeat estimates make us confident that HII will go on to win notable naval contracts from the U.S. Navy like the latest one.
Opportunities for HII's Peers
Other defense players that can gain from the expanding naval shipbuilding market are discussed below:
BAE Systems (BAESY - Free Report) designs, builds, commissions, repairs and supports a full range of complex naval ships, from offshore patrol vessels to aircraft carriers. Its Queen Elizabeth Class Aircraft Carriers are the largest warships ever constructed in the United Kingdom. It also works on the Astute and Dreadnaught class submarines.
BAESY boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for 2024 sales indicates growth of 36.3% from the reported figure of 2023.
General Dynamics’ (GD - Free Report) Marine Systems segment is the leading designer of surface combatant and auxiliary ship design and construction for the U.S. Navy. Its major programs include Arleigh Burke-class (DDG-51) guided-missile destroyer. The unit, comprising 29% of GD’s total revenues in 2023, ended the year with a backlog of $45.9 billion.
GD boasts a long-term earnings growth rate of 12.6%. The Zacks Consensus Estimate for 2024 sales indicates growth of 13.5% from the reported number of 2023.
Lockheed Martin’s (LMT - Free Report) Rotary and Mission Systems (RMS) designs, manufactures, services and supports various surface ships. It is engaged in the construction of a Freedom-variant Littoral Combat Ship, which is a resilient and flexible warship. The AEGIS Combat System is the U.S. Navy’s most modern surface combat system. RMS ended 2023 with a backlog of $37.73 billion.
LMT boasts a long-term growth rate of 4.7%. The Zacks Consensus Estimate for 2024 sales indicates growth of 5.3% from the reported figure of 2023.
Price Performance & Zacks Rank of HII
In the past year, shares of Huntington Ingalls have gained 26.3% against the industry’s 0.2% decline.
Image: Bigstock
Huntington Ingalls Wins Contract to Support Aircraft Carrier
Huntington Ingalls Industries, Inc.’s (HII - Free Report) Newport News business unit recently secured a modification contract involving the Nimitz (CVN 68) Class aircraft carrier. The award has been offered by the Naval Sea Systems Command, Washington, D.C.
Details of the Deal
Valued at $18.4 million, the contract is projected to be completed by November 2024. Per the terms of the deal, Huntington Ingalls will procure additional support to conduct pre-advanced planning for Nimitz (CVN 68) Class aircraft carrier defueling and inactivation.
Work related to this deal will be carried out in Newport News, VA.
HII’s Position in U.S. Naval Defense
An aircraft carrier plays a critical role in a nation’s ability to effectively command, control and coordinate its naval operations, thereby protecting its onshore territory. With the United States being a stalwart in the global defense map, its naval power has been a formidable one. Huntington Ingalls, being America’s sole designer and builder of nuclear-powered aircraft carriers, enjoys a dominating presence in the U.S. naval defense market.
Notably, the company’s Newport News unit has designed and built more than 31 aircraft carriers for the U.S. Navy since 1933, including all 10 Nimitz class (CVN 68) aircraft carriers currently in active service, as well as the first ship of the next-generation Gerald R. Ford class (CVN 78) aircraft carriers. This business division also engages in refueling and overhaul and the inactivation of nuclear-powered aircraft carriers.
To further strengthen its position in the U.S. naval defense space, HII is currently designing and building the next generation of aircraft carriers – the Gerald R. Ford-class aircraft carrier. With new software-controlled electromagnetic catapults and weapons elevators, a redesigned flight deck and island, and more than twice the electrical capacity of the preceding class, these aircraft carriers are truly designed for the 21st century and beyond.
With the experience of more than 135 years in building naval ships and aircraft carriers, Huntington Ingalls bears the tradition of clinching a steady flow of orders like the latest one, which in turn boosts its revenue generation prospects. Its revenues increased 6.8% year over year in the second quarter of 2024.
Will HII’s Growth be Sustainable?
With increasing geopolitical issues and territorial disputes in recent times, nations across the globe are fortifying their naval capacity. This has led to augmented spending on naval ships, including aircraft carriers, for enhanced sea warfare capabilities, thereby bolstering the growth prospects of the naval shipbuilding market.
Mordor Intelligence projects the global naval shipbuilding market to witness a CAGR of 6.5% in the 2024-2029 time period.
Such market projections are likely to benefit Huntington Ingalls, America’s largest shipbuilder and the nation’s sole builder of amphibious assault ships.
Notably, the Zacks Consensus Estimate for HII’s long-term (three-to five-years) earnings growth rate is pegged at 6.9%. The sales estimate for the company implies a year-over-year improvement of 2.6% and 3.8% in 2024 and 2025, respectively. Such upbeat estimates make us confident that HII will go on to win notable naval contracts from the U.S. Navy like the latest one.
Opportunities for HII's Peers
Other defense players that can gain from the expanding naval shipbuilding market are discussed below:
BAE Systems (BAESY - Free Report) designs, builds, commissions, repairs and supports a full range of complex naval ships, from offshore patrol vessels to aircraft carriers. Its Queen Elizabeth Class Aircraft Carriers are the largest warships ever constructed in the United Kingdom. It also works on the Astute and Dreadnaught class submarines.
BAESY boasts a long-term earnings growth rate of 12.4%. The Zacks Consensus Estimate for 2024 sales indicates growth of 36.3% from the reported figure of 2023.
General Dynamics’ (GD - Free Report) Marine Systems segment is the leading designer of surface combatant and auxiliary ship design and construction for the U.S. Navy. Its major programs include Arleigh Burke-class (DDG-51) guided-missile destroyer. The unit, comprising 29% of GD’s total revenues in 2023, ended the year with a backlog of $45.9 billion.
GD boasts a long-term earnings growth rate of 12.6%. The Zacks Consensus Estimate for 2024 sales indicates growth of 13.5% from the reported number of 2023.
Lockheed Martin’s (LMT - Free Report) Rotary and Mission Systems (RMS) designs, manufactures, services and supports various surface ships. It is engaged in the construction of a Freedom-variant Littoral Combat Ship, which is a resilient and flexible warship. The AEGIS Combat System is the U.S. Navy’s most modern surface combat system. RMS ended 2023 with a backlog of $37.73 billion.
LMT boasts a long-term growth rate of 4.7%. The Zacks Consensus Estimate for 2024 sales indicates growth of 5.3% from the reported figure of 2023.
Price Performance & Zacks Rank of HII
In the past year, shares of Huntington Ingalls have gained 26.3% against the industry’s 0.2% decline.
Image Source: Zacks Investment Research
Huntington Ingalls currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.