Huntington Ingalls Industries Inc.’s (HII) second-quarter earnings rose 25% as the military shipbuilder reported stronger revenue and margins.
The largest military shipbuilder in the U.S., like many other defense firms, has come under pressure from weaker U.S. Defense Department spending and shifts toward smaller, nimbler weapons platforms.
Huntington Ingalls was spun out of Northrop Grumman Corp. (NOC) last year and is viewed as more resilient to budget cuts than its peers because the Pentagon prioritized many naval projects as part of efforts to boost the U.S. military presence in the Pacific.
Huntington Ingalls reported a profit of $50 million, or $1 a share, up from $40 million, or 80 cents a share, a year earlier. Revenue increased 10% to $1.72 billion.
Analysts polled by Thomson Reuters projected earnings of 69 cents on revenue of $1.61 billion.
Operating margin widened to 6.2% from 5.8%.
Sales at its Ingalls division rose 6.8%, mostly on improved sales of amphibious assault ships. Operating income doubled as operating margins also improved.
At its Newport News business, revenue increased 12% amid higher sales in aircraft carriers and submarines, offset by lower fleet support services. Operating profit rose nearly 13% amid higher volume and operating margins were unchanged.
New business awards for the quarter were about $2.5 billion, bringing total backlog to $16.2 billion, compared with $16.8 billion a year earlier and $15.5 billion at the end of the first quarter.
Shares closed Tuesday at $38.64 and were inactive premarket. The stock is up 24% this year.
By Tess Stynes. (c) 2012 Dow Jones & Company, Inc.
Sign up for our newsletter