The Navy's largest U.S. trade show kicked off on Monday, breaking its traditional format due to major delays hindering key shipbuilding programs. Defense stocks slipped Tuesday as RTX, Lockheed Martin, General Dynamics and HII lost ground.
The Navy declined to provide traditional media updates on shipbuilding programs at its annual Sea Air Space Exposition, taking place from April 8 to 10 in National Harbor, Md., Politico reported. The information halt follows a 45-day shipbuilding study that found multiyear delays in four critical programs, the U.S. Naval Institute News reported last Tuesday. It attributed the delays to aging designs, supply chain issues and difficulty finding skilled workers.
The delays affect two classes of nuclear-powered submarines, including the USS District of Columbia (SSBN-826), which will be the main carrier of the U.S.' sea-based nuclear missiles. The USS District of Columbia is the first of 12 planned Columbia-class ship built by General Dynamics Electric Boat and HII that will replace Ohio-class nuclear submarines to be retired this decade. However, the submarine is projected to be 12 to 16 months late, pushing its delivery date into late 2028 or 2029.
Two updated versions of the workhorse Virginia-class submarines and attack boats, also built by General Dynamics and HII, face two- and three-year delays, respectively.
The Enterprise, the third Gerald R. Ford-class aircraft carrier being built by HII, faces up to a two-year delay. And the first Constellation-class frigate, which is under development by Fincantieri Marinette Marine, in Marinette, Wis., is three years behind schedule with a 2029 delivery goal.
Navy Delays Sink Defense Stocks
Defense stocks were under broad pressure early Tuesday. RTX stock slid 0.3%. RTX is extended above a cup-with-handle buy zone after a March 14 breakout. Shares have rallied nearly 21% so far this year.
LMT stock eased 1% Tuesday morning fall below 10-day moving average. Lockheed Martin ticked down a fraction in 2024, and is about 12% below its record high of 508.10 from April 2023.
General Dynamics stock faded around 1.5% Tuesday. GD stock on Monday reached an all-time high 296.50. Shares have trended higher since the company's late January earnings report. General Dynamics has gained 11.2% year to date.
HII, formerly known as Huntington Ingalls Industries, retreated 3.6% Tuesday to fall below its 50-day moving average. HII stock declined the past seven consecutive trading days. Shares climbed 6.1% year-to-date.
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