- Huntington Ingalls Industries Inc (NYSE:HII) reported a fourth-quarter revenue decline of 2.9% year-over-year to $2.68 billion, beating the consensus of $2.66 billion.
- EPS was $2.99, beating the consensus of $2.97. Pension Adjusted EPS was $2.84.
- The operating income declined 60.7% Y/Y to $120 million, and the margin contracted by 658 bps to 4.5%.
- Segment operating income was $160 million, compared to $242 million a year ago, and the margin contracted by 280 bps to 6%.
- Revenues by segments: Ingalls Shipbuilding $581 million (-22.7% Y/Y), Newport News Shipbuilding $1.54 billion (-12.1% Y/Y), and Technical Solutions $586 million (+88.4% Y/Y).
- Segment operating margins: Ingalls Shipbuilding 8.3% (down 450 bps), Newport News Shipbuilding 6.2% (down 114 bps), and Technical Solutions 2.9% (down 289 bps).
- Huntington Ingalls generated cash from operating activities in FY21 of $760 million compared to $1.09 billion a year ago. Free cash flow was $499 million.
- New contract awards in Q4 were ~$1 billion, and the backlog was ~$48.5 billion as of Dec. 31, 2021.
- FY22 Outlook: Huntington Ingalls Industries expects Shipbuilding Revenue of ~$8.2 billion - $8.5 billion, Shipbuilding Operating Margin of 8.0% - 8.1%
- It expects Technical Solutions Revenue of ~$2.6 billion, the corresponding segment operating margin of ~2.5%, and EBITDA margin of 8.0% - 8.5%.
- The company expects Free Cash Flow of $300 million - $350 million.
- Price Action: HII shares closed higher by 0.64% at $187.19 on Wednesday.
