Largest US military shipbuilder reports 2Q profit
(Dow Jones) Huntington Ingalls Industries Inc. (HII) swung to a smaller-than-expected second-quarter profit as lower volume hurt sales.
The country’s largest military shipbuilder was spun off from Northrop Grumman Corp. (NOC) on March 31. Analysts have pinned Huntington Ingalls’ earnings growth prospects on operational improvements as little revenue growth is expected in an environment of decelerating U.S. defense spending and a shift in military priorities toward smaller, more nimble weapons platforms.
Huntington Ingalls reported a profit of $40 million, or 80 cents a share, compared with a loss of $11 million, or 23 cents, a year earlier. Sales declined 2.9% to $1.56 billion, as the winding down of Avondale, La., shipbuilding operations hurt its sales volume.
Analysts polled by Thomson Reuters had most recently forecast earnings of 82 cents on revenue of $1.65 billion.
Operating margin swung to 5.8% from negative 1.2%.
The Newport News shipbuilding business, which accounts for the bulk of the company’s top line, saw its operating income fall 6% as sales dropped 4.5%. The Ingalls shipbuilding segment swung to an operating profit, though sales edged down 0.8%.
Shares closed Wednesday at $28.01 and were inactive premarket. The stock has fallen 28% over the last three months.
-By Melodie Warner, Dow Jones Newswires
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