Missed Targets and Presidential Election Results Spell Bad News for Huntington Ingalls

USS America (LHA 6) was christened at Huntington Ingalls’ shipyard on 20 October 2012. As an amphibious ship, its mission will include embarking, transporting, controlling, inserting, sustaining and extracting elements of a Marine Air-Ground Task Force, and support forces by helicopters and tilt-rotor aircraft. Photo by PCU America Public Affairs

(Bloomberg) — Huntington Ingalls Industries Inc. fell after the U.S. Navy’s sole builder of aircraft carriers reported third-quarter profit that missed analysts’ estimates.

Huntington, based in Newport News, Virginia, declined 5 percent to close at $41.29 in New York trading. The shares dropped 3.3 percent yesterday after President Barack Obama won re-election and defeated Mitt Romney, who had proposed increasing military spending. The two-day drop is the most since Sept. 29, 2011.

Profit fell to $37.1 million, or 74 cents a share, in the quarter ended Sept. 30 from $51.3 million, or $1.05, in the year-earlier period. Analysts had predicted per-share profit of 80 cents, the average of 13 estimates compiled by Bloomberg.

“Underperforming ships at Ingalls continue to prove challenging,” Chief Executive Officer Mike Petters said in a statement.

Sales totaled $1.6 billion in the quarter, with less-than- expected revenue from amphibious assault ships. Analysts predict 2012 sales to increase 1 percent to $6.63 billion.

Separately, the company announced its first quarterly dividend, at 10 cents a share, and plans to buy back as much as $150 million of shares over three years.

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