Huntington Ingalls posts 14 percent profit boost in second quarter
Huntington Ingalls Industries Inc., which owns shipyards in
Pascagoula, Gulfport and Avondale, La., today reported $57 million in
second-quarter profits, up from $50 million in the same period of 2012.
The Newport News, Va.-based defense giant also reported revenues of $1.68 billion during the quarter, down slightly from $1.72 billion in the year prior.
Segment operating income was 8.1 percent in the quarter, driven by “improved operating performance at Ingalls and risk retirement at Newport News,” President and CEO Mike Petters said in a earnings conference call with investors this morning.
Total operating margin was 6.9 percent, up from 6.2 percent in the same period last year.
Second-quarter earnings per share were $1.12, compared to $1 in the same period of 2012. Pension-adjusted earnings per share were $1.36, up from $1.24.
Analysts' estimates were 93 cents earnings per share.
"I am very pleased with the program execution at both Ingalls and Newport News as we drive performance toward our 2015 target of 9-plus percent operating margin," Petters said. "We also continue to strengthen our backlog and long-term revenue visibility through the receipt of major new contract awards."
New business awards for the quarter were $5.3 billion, bringing total backlog to $20.7 billion. About $13.7 billion of that backlog is funded.
At the Newport News sector, second-quarter revenues were up 5 percent, from $979 million in 2012 to $1.03 billion this year.
The increase is primarily driven by higher sales in fleet support services, aircraft carriers and submarines, the company said.
At the Ingalls Shipbuilding sector, revenues were $672 million in the quarter, down 11 percent from $756 million in 2012.
The company said that was due to lower sales in amphibious assault ships, partially offset by higher sales in the Coast Guard's National Security Cutter program and surface combatants.
During the quarter, Ingalls won a $3.3 billion fixed-price incentive, multi-year contract for construction of five Arleigh Burke-class destroyers (DDG 51s).
“This is another key contract award since the spinoff in 2011,” Petters said.
The Ingalls yard was also awarded a $487 million contract to build NSC-6 Munro and a $76.8 million contract for long-lead materials on NSC-7 Kimball.
LPD 25, the last amphibious transport dock being built at the Avondale yard, suffered a minor setback during dock trials, Petters said.
Debris from the Mississippi River became entangled in a propeller, he said, and the ship had to be dry-docked and fixed.
The ship is still on track for builder’s trials in the third quarter and delivery in the fourth quarter.
Petters said the company expected the ship to be docked for 3 to 4 weeks, but LPD 25 was “out of dock in 9 days,” Petter said. “I couldn’t be more proud of that team.”
Barb Niland, the company’s chief financial officer, told investors this morning that the team is “working hard to minimize costs” related to the incident.
The financial impact could range from $2 million to $15 million, she said, and, if not mitigated, would be recognized in the company’s third quarter.
The company’s composite yard in Gulfport could be affected by a Navy decision announced last week to move from a composite deckhouse to a steel deckhouse on future DDG 1000-class ships.
The Gulfport yard has worked on DDG 1000 and DDG 1001, but the Navy announced Friday that General Dynamics’ Bath Iron Works was awarded a $212 million contract to design and construct a steel superstructure and to build an aft peripheral vertical launching system for DDG 1002.
“We’re now looking at what’s the future of Gulfport,” Petters said in the conference call. “In the meantime we have work there to do on (DDG) 1001 that will be executed over the next year or so … and some composite superstructure work on LPDs.”
Ingalls Shipbuilding in Pascagoula
The Newport News, Va.-based defense giant also reported revenues of $1.68 billion during the quarter, down slightly from $1.72 billion in the year prior.
Segment operating income was 8.1 percent in the quarter, driven by “improved operating performance at Ingalls and risk retirement at Newport News,” President and CEO Mike Petters said in a earnings conference call with investors this morning.
Total operating margin was 6.9 percent, up from 6.2 percent in the same period last year.
Second-quarter earnings per share were $1.12, compared to $1 in the same period of 2012. Pension-adjusted earnings per share were $1.36, up from $1.24.
Analysts' estimates were 93 cents earnings per share.
"I am very pleased with the program execution at both Ingalls and Newport News as we drive performance toward our 2015 target of 9-plus percent operating margin," Petters said. "We also continue to strengthen our backlog and long-term revenue visibility through the receipt of major new contract awards."
New business awards for the quarter were $5.3 billion, bringing total backlog to $20.7 billion. About $13.7 billion of that backlog is funded.
At the Newport News sector, second-quarter revenues were up 5 percent, from $979 million in 2012 to $1.03 billion this year.
The increase is primarily driven by higher sales in fleet support services, aircraft carriers and submarines, the company said.
At the Ingalls Shipbuilding sector, revenues were $672 million in the quarter, down 11 percent from $756 million in 2012.
The company said that was due to lower sales in amphibious assault ships, partially offset by higher sales in the Coast Guard's National Security Cutter program and surface combatants.
During the quarter, Ingalls won a $3.3 billion fixed-price incentive, multi-year contract for construction of five Arleigh Burke-class destroyers (DDG 51s).
“This is another key contract award since the spinoff in 2011,” Petters said.
The Ingalls yard was also awarded a $487 million contract to build NSC-6 Munro and a $76.8 million contract for long-lead materials on NSC-7 Kimball.
LPD 25, the last amphibious transport dock being built at the Avondale yard, suffered a minor setback during dock trials, Petters said.
Debris from the Mississippi River became entangled in a propeller, he said, and the ship had to be dry-docked and fixed.
The ship is still on track for builder’s trials in the third quarter and delivery in the fourth quarter.
Petters said the company expected the ship to be docked for 3 to 4 weeks, but LPD 25 was “out of dock in 9 days,” Petter said. “I couldn’t be more proud of that team.”
Barb Niland, the company’s chief financial officer, told investors this morning that the team is “working hard to minimize costs” related to the incident.
The financial impact could range from $2 million to $15 million, she said, and, if not mitigated, would be recognized in the company’s third quarter.
The company’s composite yard in Gulfport could be affected by a Navy decision announced last week to move from a composite deckhouse to a steel deckhouse on future DDG 1000-class ships.
The Gulfport yard has worked on DDG 1000 and DDG 1001, but the Navy announced Friday that General Dynamics’ Bath Iron Works was awarded a $212 million contract to design and construct a steel superstructure and to build an aft peripheral vertical launching system for DDG 1002.
“We’re now looking at what’s the future of Gulfport,” Petters said in the conference call. “In the meantime we have work there to do on (DDG) 1001 that will be executed over the next year or so … and some composite superstructure work on LPDs.”
Ingalls Shipbuilding in Pascagoula
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