Huntington Ingalls Industries reported record revenue and higher earnings for the third quarter, with growth at both of its shipbuilding divisions. The defense contractor also booked $32.4 billion in new awards, prompting it to raise its full-year shipbuilding revenue outlook while leaving its margin and free-cash-flow outlook unchanged.
The awards provide substantial revenue visibility for the shipbuilding business, but the company said its immediate focus is on executing that work.
Key details
- Revenue reached a quarterly record of $3.5 billion, up 10.8% from the third quarter of 2025. HII attributed the increase to growth at Newport News Shipbuilding and Ingalls Shipbuilding.
- Operating income rose to $246 million from $161 million a year earlier, while operating margin improved to 7.0% from 5.0%.
- On a segment basis, operating income increased to $262 million from $179 million, and segment operating margin rose to 7.4% from 5.6%.
- Net earnings were $217 million, or $5.48 per diluted share, compared with $145 million, or $3.68 per diluted share, in the year-earlier quarter.
- Cash generation improved: cash from operating activities was $520 million, versus $118 million a year earlier. Free cash flow was $429 million, compared with $16 million.
- New contract awards totaled $32.4 billion in the quarter and $43.1 billion year to date. HII said the quarter’s awards brought coverage to about 90% of its expected shipbuilding revenue through 2030.
- HII raised its 2026 shipbuilding revenue guidance to $10.5 billion–$10.7 billion. It reaffirmed its shipbuilding operating-margin outlook of 6.0%–6.5% and its previously issued free-cash-flow outlook.
- In Mission Technologies, HII highlighted awards for the Medium Unmanned Surface Vessel and Lionfish small unmanned undersea vehicle, describing them as significant wins in maritime autonomy.
The awards add long-term revenue visibility, while the higher shipbuilding revenue outlook reflects the company’s revised expectations for 2026. The release does not provide a dollar amount for the reaffirmed free-cash-flow outlook.