Christie Thomas (Investors)
757-380-2104 HII Reports Third Quarter 2026 Results NEWPORT NEWS, Va. (October 29, 2026) - HII (NYSE: HII) today reported results for the third quarter of fiscal 2026.
• Third quarter net earnings were $217 million or $5.48 diluted earnings per share
• Company raises the FY26 shipbuilding revenue guidance range to between $10.5 and $10.7 billion 1
• Company reaffirms FY26 shipbuilding operating margin 2 guidance range of 6.0 to 6.5 percent 1
Third quarter 2026 revenues of $3.5 billion were up 10.8% from the third quarter of 2025, driven by growth at Newport News Shipbuilding and Ingalls Shipbuilding.
Operating income in the third quarter of 2026 was $246 million and operating margin was 7.0%, compared to $161 million and 5.0%, respectively, in the third quarter of 2025.
Segment operating income 2 in the third quarter of 2026 was $262 million and segment operating margin 2 was 7.4%, compared to $179 million and 5.6%, respectively, in the third quarter of 2025.
Net earnings in the third quarter of 2026 were $217 million, compared to $145 million in the third quarter of 2025. Diluted earnings per share in the quarter was $5.48, compared to $3.68 in the third quarter of 2025.
Net cash provided by operating activities in the quarter was $520 million and free cash flow 2 was $429 million, compared to net cash provided by operating activities of $118 million and free cash flow 2 of $16 million in the third quarter of 2025.
New contract awards in the third quarter of 2026 were $32.4 billion. Year-to- date contract awards totaled $43.1 billion.
Commenting on the Company's third quarter 2026 results, Chris Kastner, HII's president and CEO said, “Our third quarter results reflect solid performance across all three segments, and the significant awards we received during the quarter have now secured approximately 90 percent of our expected shipbuilding revenue through 2030. With that visibility, our focus is squarely on shipbuilding execution. At Mission Technologies, we won landmark maritime autonomy awards for the Medium Unmanned Surface Vessel (MUSV) and the Lionfish Small Unmanned Undersea Vehicle (SUUV), demonstrating our continued leadership in unmanned systems and maritime autonomy."
1 The financial outlook, expectations, and other forward-looking statements provided by the company for 2026 and beyond reflect the company's judgment based on information available at the time of this release. Please see the "Cautionary Statement Regarding Forward-Looking Statements and Projections" section in this release and the “Forward-Looking Statements and Projections” section in our Quarterly Report on Form 10-Q for factors that may impact the company's ability to meet expectations.
Ingalls Shipbuilding revenues for the third quarter of 2026 were $876 million, an increase of $48 million, or 5.8%, from the same period in 2025, primarily driven by higher volumes in amphibious assault ships.
Ingalls Shipbuilding segment operating income for the third quarter of 2026 was $59 million, a decrease of $6 million from the same period in 2025. Segment operating margin in the third quarter of 2026 was 6.7%, compared to 7.9% in the same period last year. The decrease in operating income was primarily driven by lower performance in surface combatants.
• Expanded distributed shipbuilding to amphibious ships and erected first grand block built by distributed shipbuilding partners on guided missile destroyer Thad Cochran (DDG 135)
• Signed performance-based production agreements with Path Robotics and GrayMatter Robotics designed to accelerate the development and deployment of advanced automation across U.S. Navy shipbuilding programs
• Launched intelligent mechanized automated welding pilot with HD Hyundai Heavy Industries
Newport News Shipbuilding revenues for the third quarter of 2026 were $1.9 billion, an increase of $293 million, or 18.1%, from the same period in 2025. The increase was primarily driven by higher volumes in submarines and aircraft carriers.
Newport News Shipbuilding segment operating income for the third quarter of 2026 was $132 million, an increase of $52 million from the same period in 2025. Segment operating margin in the third quarter of 2026 was 6.9% compared to 4.9% in the same period last year. The increase in operating income was primarily driven by contract adjustments and incentives in the Virginia -class submarine program and higher submarine and aircraft carrier volumes.
• Awarded contracts for the construction of Block VI Virginia -class and Build II Columbia -class submarines
• Awarded long-lead time materials contract for the construction of planned aircraft carrier CVN 82
Mission Technologies revenues for the third quarter of 2026 were $792 million, an increase of $5 million, or 0.6%, from the same period in 2025. The increase was primarily due to higher volumes in Unmanned Systems, partially offset by lower volumes in Global Security.
Mission Technologies segment operating income for the third quarter of 2026 was $71 million, an increase of $37 million from the same period in 2025. Segment operating margin in the third quarter of 2026 was 9.0%, compared to 4.3% in the same period last year. The increase in operating income was primarily due to a successful milestone achievement and higher volumes in Unmanned Systems and higher equity income from nuclear and environmental joint ventures.
Mission Technologies results included approximately $18 million of amortization of purchased intangible assets in the third quarter of 2026, compared to approximately $22 million in the same period last year.
Mission Technologies EBITDA margin 1 in the third quarter of 2026 was 11.9%, compared to 7.8% in the third quarter of 2025.
• Awarded contract for 10 ROMULUS USVs, accelerating deployment of proven autonomous capability
• Awarded option year contract for U.S. Navy Lionfish Small Unmanned Undersea Vehicle (SUUV) production
• Awarded $2.2 billion contract to advance U.S. surveillance and intelligence capabilities for the Western Hemisphere
• Expanded unmanned production facility by 25% to meet growing global maritime demand
• FY26 shipbuilding revenue between $10.5 and $10.7 billion; expect shipbuilding operating margin 2 between 6.0% and 6.5%
• FY26 Mission Technologies segment operating margin of approximately 6%; and Mission Technologies EBITDA margin 2 of approximately 9%
• Cumulative FY26 & FY27 free cash flow 2 target of between $1.2 billion and $1.3 billion
Prior FY26 Outlook Current FY26 Outlook1 Shipbuilding Revenue $10.2B - $10.4B $10.5B - $10.7B Shipbuilding Operating 6.0% - 6.5% 6.0% - 6.5% Margin2 Mission Technologies Revenue $3.0B - $3.2B $3.0B - $3.2B Mission Technologies Segment Operating ~5% ~6% Margin Mission Technologies EBITDA 8.4% - 8.6% ~9% Margin2 Operating FAS/CAS Adjustment -$44M -$40M Non-current State Income Tax ~($20M) -$27M Expense3 Interest Expense -$105M -$100M Non-operating Retirement $213M $213M Benefit Effective Tax Rate ~17% ~17% Depreciation & Amortization ~$330M ~$330M Capital Expenditures 4% - 5% of Sales ~$500M Free Cash Flow2 $500M - $600M $500M - $600M
1 The financial outlook, expectations, and other forward-looking statements provided by the company for 2026 and beyond reflect the company's judgment based on the information available at the time of this release. Please see the "Cautionary Statement Regarding Forward-Looking Statements and Projections" section in this release and the “Forward-Looking Statements and Projections” section in our Quarterly Report on Form 10-Q for factors that may impact the company's ability to meet expectations.
2 Non-GAAP measures. See Exhibit B for definitions. In reliance upon Item 10(e)(1)(i)(B) of Regulation S-K, reconciliations of forward–looking GAAP and non–GAAP measures are not provided because of the unreasonable effort associated with providing such reconciliations due to the variability in the occurrence and the amounts of certain components of GAAP and non-GAAP measures. For the same reasons, we are unable to address the significance of the unavailable information, which could be material to future results.
3 Outlook is based on current tax law. Variability exists based on how and when individual states conform to recent federal tax law changes.
HII is America's Seapower Company. The nation’s largest shipbuilder, HII builds the manned and unmanned maritime systems and all-domain mission technologies that project U.S. and allied power around the world. With a more than 140-year history of advancing U.S. national security, HII is headquartered in Virginia and employs 46,000 people across three divisions. For more information, visit www.HII.com.
HII will webcast its earnings conference call at 9 a.m. Eastern time today. A live audio broadcast of the conference call and supplemental presentation will be available on the investor relations page of the company’s website: www.HII.com. A replay of the call will be available on the website for a limited time.
Page 5 of 12 Cautionary Statement Regarding Forward-Looking Statements and Projections
Statements in this earnings release and in our other filings with the SEC, as well as other statements we may make from time to time, other than statements of historical fact, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance," "outlook," "predicts," "potential," "continue," and similar words or phrases or the negative of these words or phrases. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable when made, we cannot guarantee future results, levels of activity, performance, or achievements. There are a number of important factors that could cause our actual results to differ materially from the results anticipated by our forward- looking statements, which include, but are not limited to:
• significant delays or reductions in appropriations for our programs and/or changes in customer priorities and requirements (including government budgetary constraints, government shutdowns, shifts in defense spending, and changes in customer short-range and long-range plans);
• our ability to estimate our future contract costs, including cost increases due to inflation, labor challenges, changes in trade policy, or other factors and our efforts to recover or offset such costs and/or changes in estimated contract costs, and perform our contracts effectively;
• changes in business practices, procurement processes and government regulations, including changes through executive orders, contract terms, or other policies or practices applicable to our industry, and our ability to comply with such requirements;
• our ability to deliver our products and services at an affordable life cycle cost and compete within our markets;
• subcontractor and supplier performance and the availability and pricing of raw materials and components;
• our ability to execute our strategic plan, including with respect to share repurchases, dividends, capital expenditures, and strategic acquisitions;
• investigations, claims, disputes, enforcement actions, litigation (including criminal, civil, and administrative), and/or other legal proceedings, and improper conduct of employees, agents, subcontractors, suppliers, business partners, or joint ventures in which we participate, including the impact on our reputation or ability to do business;
• changes in key estimates and assumptions regarding our pension and retiree health care costs;
There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business, and we undertake no obligation to update or revise any forward-looking statements. You should not place undue reliance on any forward-looking statements that we may make.
This release also contains non-GAAP financial measures and includes a GAAP reconciliation of these financial measures. Non-GAAP financial measures should not be construed as being more important than comparable GAAP measures.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (UNAUDITED)
September 30, December 31, ($ in millions) 2026 2025 ────────────────────────────────────────────────────────────────────────────── Assets Current Assets Cash and cash $ 387 $ 774 equivalents Accounts receivable, net of allowance for expected credit losses 361 339 of $3 million as of 2026 and $2 million as of 2025 Contract assets 2,125 1,758 Inventoried 240 219 costs Income taxes 250 284 receivable Prepaid expenses and 100 77 other current assets Total current 3,463 3,451 assets Property, plant, and equipment, net of accumulated depreciation of 3,849 3,726 $2,892 million as of 2026 and $2,754 million as of 2025 Operating lease 275 267 assets Goodwill 2,650 2,650 Other intangible assets, net of accumulated amortization of 631 694 $1,285 million as of 2026 and $1,222 million as of 2025 Pension plan 1,668 1,544 assets Miscellaneous 444 417 other assets Total assets $ 12,980 $ 12,749 Liabilities and Stockholders' Equity Current Liabilities Trade accounts $ 709 $ 556 payable Accrued employees’ 403 443 compensation Current portion of postretirement 119 119 plan liabilities Current portion of workers’ 214 217 compensation liabilities Contract 780 1,220 liabilities Other current 513 490 liabilities Total current 2,738 3,045 liabilities Long-term debt 2,704 2,700 Pension plan 155 155 liabilities Other postretirement 187 200 plan liabilities Workers’ compensation 437 442 liabilities Long-term operating lease 225 223 liabilities Deferred tax 694 572 liabilities Other long-term 348 339 liabilities Total 7,488 7,676 liabilities Commitments and Contingencies Stockholders’ Equity Common stock, $0.01 par value; 150,000,000 shares authorized; 53,990,247 shares issued and 39,405,538 1 1 shares outstanding as of 2026, and 53,826,236 shares issued and 39,241,527 shares outstanding as of 2025 Additional 2,096 2,087 paid-in capital Retained 5,893 5,487 earnings Treasury stock -2,449 -2,449 Accumulated other -49 -53 comprehensive loss Total stockholders’ 5,492 5,073 equity Total liabilities and $ 12,980 $ 12,749 stockholders’ equity
Nine Months Ended September ($ in millions) 30 Operating Activities: 2026 2025 ────────────────────────────────────────────────────────────────────────────── Net earnings $ 574 $ 446 Adjustments to reconcile net cash provided by operating activities: Depreciation 167 164 Amortization of purchased 63 78 intangibles Stock-based compensation 47 43 Deferred income taxes 120 121 Gain on investments in marketable -18 -28 securities Other non-cash 17 15 transactions, net Change in Accounts receivable -22 -162 Contract assets -367 -186 Inventoried costs -21 -13 Prepaid expenses and -2 -23 other assets Accounts payable and -327 207 accruals Retiree benefits -132 -116 Net cash provided by operating 99 546 activities Investing Activities: Capital expenditures Capital expenditure -288 -268 additions Grant proceeds for 7 6 capital expenditures Proceeds from sale of — 5 investments Acquisitions of — -132 businesses Other investing 1 2 activities, net Net cash used in -280 -387 investing activities Financing Activities: Repayment of long-term — -500 debt Proceeds from line of 17 — credit borrowings Repayment of line of -17 — credit borrowings Dividends paid -163 -159 Employee taxes on certain share-based -43 -14 payment arrangements Other financing — -5 activities, net Net cash used in -206 -678 financing activities Change in cash and cash -387 -519 equivalents Cash and cash equivalents, beginning of 774 831 period Cash and cash equivalents, end of $ 387 $ 312 period Supplemental Cash Flow Disclosure Cash paid for income taxes (net of $ 19 $ 71 refunds) Cash paid for interest $ 96 $ 86 Non-Cash Investing and Financing Activities Capital expenditures accrued in accounts $ 14 $ 7 payable
This earnings release contains non-GAAP (accounting principles generally accepted in the United States of America) financial measures as defined by SEC Regulation G and indicated by a footnote in the text of this release. Definitions for the non-GAAP measures, and related reconciliations, are provided below. Because not all companies use identical definitions or calculations, our presentation of these measures may not be comparable to similarly titled measures of other companies.
Segment Operating Income and Segment Operating Margin. We internally manage our operations by reference to segment operating income and segment operating margin and use these measures to evaluate our core operating performance. We believe that segment operating income and segment operating margin reflect additional ways of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These measures should be considered in addition to, and not as alternatives for, operating income and operating margin or any other performance measure presented in accordance with GAAP.
is defined as operating income for the relevant segment(s) before the Operating FAS/CAS Adjustment and non-current state income taxes.
is defined as segment operating income as a percentage of sales and service revenues.
Shipbuilding operating margin, Mission Technologies EBITDA and Mission Technologies EBITDA margin. We use shipbuilding operating margin, Mission Technologies EBITDA and Mission Technologies EBITDA margin to evaluate our core operating performance. We believe these measures reflect additional ways of viewing aspects of our operations that, when viewed with our GAAP results, provide a more complete understanding of factors and trends affecting our business. These measures should be considered in addition to, and not as alternatives for, operating income and operating margin or any other performance measure presented in accordance with GAAP.
is defined as the combined segment operating income of our Newport News Shipbuilding segment and Ingalls Shipbuilding segment as a percentage of shipbuilding revenue. Shipbuilding revenue is the sum of revenues of our Newport News Shipbuilding segment and Ingalls Shipbuilding segment.
is defined as Mission Technologies segment operating income before interest expense, income taxes, depreciation, and amortization.
is defined as Mission Technologies EBITDA as a percentage of Mission Technologies revenues.
We use free cash flow as a key operating metric in assessing the performance of our business and as a key performance measure in evaluating management performance and determining incentive compensation. We believe free cash flow is an important liquidity measure that may be useful to investors and other users of our financial statements because it provides insight into our current and period-to-period performance and our ability to generate cash from continuing operations. Free cash flow has limitations as an analytical tool and should not be considered in isolation from, or as a substitute for, net income as a measure of our performance or net cash provided by operating activities as a measure of our liquidity.
is defined as net cash provided by (used in) operating activities less capital expenditures net of related grant proceeds.
In reliance upon Item 10(e)(1)(i)(B) of Regulation S-K, reconciliations of forward-looking GAAP and non-GAAP measures are not provided because of the unreasonable effort associated with providing such reconciliations due to the variability in the occurrence and the amounts of certain components of GAAP and non-GAAP measures. For the same reasons, we are unable to address the significance of the unavailable information, which could be material to future results.
Page 10 of 12 Reconciliations of Segment Operating Income and Segment Operating Margin
Full text with the tables
Exhibit 99.1
News Release
Contacts:
Brooke Hart (Media)
brooke.hart@hii.com
202-264-7108
Christie Thomas (Investors)
christie.thomas@hii.com
757-380-2104
HII Reports Third Quarter 2026 Results
NEWPORT NEWS, Va. (October 29, 2026) - HII (NYSE: HII) today reported results
for the third quarter of fiscal 2026.
Highlights
• Record third quarter revenues of $3.5 billion
• Third quarter net earnings were $217 million or $5.48 diluted earnings per
share
• New contract awards in the third quarter totaled $32.4 billion
• Company raises the FY26 shipbuilding revenue guidance range to between $10.5
and $10.7 billion 1
• Company reaffirms FY26 shipbuilding operating margin 2 guidance range of 6.0
to 6.5 percent 1
• Company reaffirms previously issued FY26 free cash flow 2 outlook 1
Third Quarter Results
Third quarter 2026 revenues of $3.5 billion were up 10.8% from the third quarter
of 2025, driven by growth at Newport News Shipbuilding and Ingalls Shipbuilding.
Operating income in the third quarter of 2026 was $246 million and operating
margin was 7.0%, compared to $161 million and 5.0%, respectively, in the third
quarter of 2025.
Segment operating income 2 in the third quarter of 2026 was $262 million and
segment operating margin 2 was 7.4%, compared to $179 million and 5.6%,
respectively, in the third quarter of 2025.
Net earnings in the third quarter of 2026 were $217 million, compared to $145
million in the third quarter of 2025. Diluted earnings per share in the quarter
was $5.48, compared to $3.68 in the third quarter of 2025.
Net cash provided by operating activities in the quarter was $520 million and
free cash flow 2 was $429 million, compared to net cash provided by operating
activities of $118 million and free cash flow 2 of $16 million in the third
quarter of 2025.
New contract awards in the third quarter of 2026 were $32.4 billion. Year-to-
date contract awards totaled $43.1 billion.
Commenting on the Company's third quarter 2026 results, Chris Kastner, HII's
president and CEO said, “Our third quarter results reflect solid performance
across all three segments, and the significant awards we received during the
quarter have now secured approximately 90 percent of our expected shipbuilding
revenue through 2030. With that visibility, our focus is squarely on
shipbuilding execution. At Mission Technologies, we won landmark maritime
autonomy awards for the Medium Unmanned Surface Vessel (MUSV) and the Lionfish
Small Unmanned Undersea Vehicle (SUUV), demonstrating our continued leadership
in unmanned systems and maritime autonomy."
1 The financial outlook, expectations, and other forward-looking statements
provided by the company for 2026 and beyond reflect the company's judgment based
on information available at the time of this release. Please see the "Cautionary
Statement Regarding Forward-Looking Statements and Projections" section in this
release and the “Forward-Looking Statements and Projections” section in our
Quarterly Report on Form 10-Q for factors that may impact the company's ability
to meet expectations.
2 Non-GAAP measures. See Exhibit B for definitions and reconciliations.
HII
4101 Washington Ave. • Newport News, VA 23607
www.HII.com
Page 1 of 12
Results of Operations
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Segment Operating Results
Ingalls Shipbuilding
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Ingalls Shipbuilding revenues for the third quarter of 2026 were $876 million,
an increase of $48 million, or 5.8%, from the same period in 2025, primarily
driven by higher volumes in amphibious assault ships.
Ingalls Shipbuilding segment operating income for the third quarter of 2026 was
$59 million, a decrease of $6 million from the same period in 2025. Segment
operating margin in the third quarter of 2026 was 6.7%, compared to 7.9% in the
same period last year. The decrease in operating income was primarily driven by
lower performance in surface combatants.
Key Ingalls Shipbuilding milestones for the quarter:
• Christened guided missile destroyer George M. Neal (DDG 131)
• Expanded distributed shipbuilding to amphibious ships and erected first grand
block built by distributed shipbuilding partners on guided missile destroyer
Thad Cochran (DDG 135)
• Signed performance-based production agreements with Path Robotics and
GrayMatter Robotics designed to accelerate the development and deployment of
advanced automation across U.S. Navy shipbuilding programs
• Launched intelligent mechanized automated welding pilot with HD Hyundai Heavy
Industries
HII
4101 Washington Ave. • Newport News, VA 23607
www.HII.com
Page 2 of 12
Newport News Shipbuilding
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$ … $ … $ … … % … $ … …
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…
Newport News Shipbuilding revenues for the third quarter of 2026 were $1.9
billion, an increase of $293 million, or 18.1%, from the same period in 2025.
The increase was primarily driven by higher volumes in submarines and aircraft
carriers.
Newport News Shipbuilding segment operating income for the third quarter of 2026
was $132 million, an increase of $52 million from the same period in 2025.
Segment operating margin in the third quarter of 2026 was 6.9% compared to 4.9%
in the same period last year. The increase in operating income was primarily
driven by contract adjustments and incentives in the Virginia -class submarine
program and higher submarine and aircraft carrier volumes.
Key Newport News Shipbuilding milestones for the quarter:
• Awarded contracts for the construction of Block VI Virginia -class and Build
II Columbia -class submarines
• Achieved preliminary acceptance of John F. Kennedy (CVN 79)
• Awarded long-lead time materials contract for the construction of planned
aircraft carrier CVN 82
Mission Technologies
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$ … $ … $ 5 … % … $ … …
… … … … % … … …
… % … % … … %
…
Mission Technologies revenues for the third quarter of 2026 were $792 million,
an increase of $5 million, or 0.6%, from the same period in 2025. The increase
was primarily due to higher volumes in Unmanned Systems, partially offset by
lower volumes in Global Security.
Mission Technologies segment operating income for the third quarter of 2026 was
$71 million, an increase of $37 million from the same period in 2025. Segment
operating margin in the third quarter of 2026 was 9.0%, compared to 4.3% in the
same period last year. The increase in operating income was primarily due to a
successful milestone achievement and higher volumes in Unmanned Systems and
higher equity income from nuclear and environmental joint ventures.
Mission Technologies results included approximately $18 million of amortization
of purchased intangible assets in the third quarter of 2026, compared to
approximately $22 million in the same period last year.
Mission Technologies EBITDA margin 1 in the third quarter of 2026 was 11.9%,
compared to 7.8% in the third quarter of 2025.
Key Mission Technologies milestones for the quarter:
• Achieved third quarter 2026 book-to-bill of 2.4x
• Awarded contract for 10 ROMULUS USVs, accelerating deployment of proven
autonomous capability
• Awarded option year contract for U.S. Navy Lionfish Small Unmanned Undersea
Vehicle (SUUV) production
• Awarded $2.2 billion contract to advance U.S. surveillance and intelligence
capabilities for the Western Hemisphere
• Expanded unmanned production facility by 25% to meet growing global maritime
demand
1 Non-GAAP measures. See Exhibit B for definitions and reconciliations.
HII
4101 Washington Ave. • Newport News, VA 23607
www.HII.com
Page 3 of 12
HII Financial Outlook
1
• FY26 shipbuilding revenue between $10.5 and $10.7 billion; expect shipbuilding
operating margin 2 between 6.0% and 6.5%
• FY26 Mission Technologies revenue between $3.0 and $3.2 billion
• FY26 Mission Technologies segment operating margin of approximately 6%; and
Mission Technologies EBITDA margin 2 of approximately 9%
• FY26 free cash flow 2 between $500 and $600 million
• Cumulative FY26 & FY27 free cash flow 2 target of between $1.2 billion and
$1.3 billion
Prior FY26 Outlook Current FY26 Outlook1
Shipbuilding Revenue $10.2B - $10.4B $10.5B - $10.7B
Shipbuilding Operating 6.0% - 6.5% 6.0% - 6.5%
Margin2
Mission Technologies Revenue $3.0B - $3.2B $3.0B - $3.2B
Mission Technologies Segment
Operating ~5% ~6%
Margin
Mission Technologies EBITDA 8.4% - 8.6% ~9%
Margin2
Operating FAS/CAS Adjustment -$44M -$40M
Non-current State Income Tax ~($20M) -$27M
Expense3
Interest Expense -$105M -$100M
Non-operating Retirement $213M $213M
Benefit
Effective Tax Rate ~17% ~17%
Depreciation & Amortization ~$330M ~$330M
Capital Expenditures 4% - 5% of Sales ~$500M
Free Cash Flow2 $500M - $600M $500M - $600M
1 The financial outlook, expectations, and other forward-looking statements
provided by the company for 2026 and beyond reflect the company's judgment based
on the information available at the time of this release. Please see the
"Cautionary Statement Regarding Forward-Looking Statements and Projections"
section in this release and the “Forward-Looking Statements and Projections”
section in our Quarterly Report on Form 10-Q for factors that may impact the
company's ability to meet expectations.
2 Non-GAAP measures. See Exhibit B for definitions. In reliance upon Item
10(e)(1)(i)(B) of Regulation S-K, reconciliations of forward–looking GAAP and
non–GAAP measures are not provided because of the unreasonable effort associated
with providing such reconciliations due to the variability in the occurrence and
the amounts of certain components of GAAP and non-GAAP measures. For the same
reasons, we are unable to address the significance of the unavailable
information, which could be material to future results.
3 Outlook is based on current tax law. Variability exists based on how and when
individual states conform to recent federal tax law changes.
HII
4101 Washington Ave. • Newport News, VA 23607
www.HII.com
Page 4 of 12
About HII
HII is America's Seapower Company. The nation’s largest shipbuilder, HII builds
the manned and unmanned maritime systems and all-domain mission technologies
that project U.S. and allied power around the world. With a more than 140-year
history of advancing U.S. national security, HII is headquartered in Virginia
and employs 46,000 people across three divisions. For more information, visit
www.HII.com.
Conference Call Information
HII will webcast its earnings conference call at 9 a.m. Eastern time today. A
live audio broadcast of the conference call and supplemental presentation will
be available on the investor relations page of the company’s website:
www.HII.com. A replay of the call will be available on the website for a limited
time.
HII
4101 Washington Ave. • Newport News, VA 23607
www.HII.com
Page 5 of 12
Cautionary Statement Regarding Forward-Looking Statements and Projections
Statements in this earnings release and in our other filings with the SEC, as
well as other statements we may make from time to time, other than statements of
historical fact, constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. In some cases, you can
identify forward-looking statements by words such as "may," "will," "should,"
"expects," "intends," "plans," "anticipates," "believes," "estimates,"
"guidance," "outlook," "predicts," "potential," "continue," and similar words or
phrases or the negative of these words or phrases. These statements relate to
future events or our future financial performance and involve known and unknown
risks, uncertainties, and other factors that may cause our actual results,
levels of activity, performance, or achievements to be materially different from
any future results, levels of activity, performance, or achievements expressed
or implied by these forward-looking statements. Although we believe the
expectations reflected in the forward-looking statements are reasonable when
made, we cannot guarantee future results, levels of activity, performance, or
achievements. There are a number of important factors that could cause our
actual results to differ materially from the results anticipated by our forward-
looking statements, which include, but are not limited to:
• our dependence on the U.S. Government for substantially all of our business;
• significant delays or reductions in appropriations for our programs and/or
changes in customer priorities and requirements (including government budgetary
constraints, government shutdowns, shifts in defense spending, and changes in
customer short-range and long-range plans);
• our ability to estimate our future contract costs, including cost increases
due to inflation, labor challenges, changes in trade policy, or other factors
and our efforts to recover or offset such costs and/or changes in estimated
contract costs, and perform our contracts effectively;
• changes in business practices, procurement processes and government
regulations, including changes through executive orders, contract terms, or
other policies or practices applicable to our industry, and our ability to
comply with such requirements;
• adverse economic conditions in the United States and globally;
• our level of indebtedness and ability to service our indebtedness;
• our ability to deliver our products and services at an affordable life cycle
cost and compete within our markets;
• our ability to attract, retain, and train a qualified workforce;
• subcontractor and supplier performance and the availability and pricing of raw
materials and components;
• our ability to execute our strategic plan, including with respect to share
repurchases, dividends, capital expenditures, and strategic acquisitions;
• investigations, claims, disputes, enforcement actions, litigation (including
criminal, civil, and administrative), and/or other legal proceedings, and
improper conduct of employees, agents, subcontractors, suppliers, business
partners, or joint ventures in which we participate, including the impact on our
reputation or ability to do business;
• changes in key estimates and assumptions regarding our pension and retiree
health care costs;
• security threats, including cyber security threats, and related disruptions;
• natural and environmental disasters and political instability;
• health epidemics, pandemics and similar outbreaks; and
• other risk factors discussed herein and in our other filings with the SEC.
There may be other risks and uncertainties that we are unable to predict at this
time or that we currently do not expect to have a material adverse effect on our
business, and we undertake no obligation to update or revise any forward-looking
statements. You should not place undue reliance on any forward-looking
statements that we may make.
This release also contains non-GAAP financial measures and includes a GAAP
reconciliation of these financial measures. Non-GAAP financial measures should
not be construed as being more important than comparable GAAP measures.
HII
4101 Washington Ave. • Newport News, VA 23607
www.HII.com
Page 6 of 12
Exhibit A: Financial Statements
HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
(in
millio…
except
per
share Three Nine
amount… Months Months
Sales Ended Ended
and Septemb… Septemb…
service 30 30
revenu… 2026 2025 2026 2025
──────────────────────────────────────────────────────────────────────────────
Product $ 2,437 $ 2,072 $ 6,712 $ 5,742
sales
Service 1,100 1,120 3,342 3,266
revenu…
Sales
and 3,537 3,192 10,054 9,008
service
revenu…
Cost of
sales
and
service
revenu…
Cost of
product 2,100 1,815 5,826 4,962
sales
Cost of
service 957 983 2,909 2,863
revenu…
Income
from
operat… 26 12 52 33
invest…
net
Other
income
and -3 — -3 1
gains
(losse…
net
General
and 257 245 757 732
admini…
expens…
Operat… 246 161 611 485
income
Other
income
(expen…
Intere… -26 -23 -75 -79
expense
Non-op…
retire… 53 48 159 143
benefit
Other, 2 18 22 30
net
Earnin…
before 275 204 717 579
income
taxes
Federal
and
foreign 58 59 143 133
income
tax
expense
Net $ 217 $ 145 $ 574 $ 446
earnin…
Basic
earnin… $ 5.49 $ 3.69 $ 14.57 $ 11.35
per
share
Weight…
common 39.5 39.3 39.4 39.3
shares
outsta…
Diluted
earnin… $ 5.48 $ 3.68 $ 14.53 $ 11.35
per
share
Weight…
diluted 39.6 39.4 39.5 39.3
shares
outsta…
Divide…
declar… $ 1.38 $ 1.35 $ 4.14 $ 4.05
per
share
Net
earnin… $ 217 $ 145 $ 574 $ 446
from
above
Other
compre…
income
Change
in
unamor… 2 1 6 3
benefit
plan
costs
Tax
expense
for
items -1 -1 -2 -1
of
other
compre…
income
Other
compre…
income, 1 — 4 2
net of
tax
Compre… $ 218 $ 145 $ 578 $ 448
income
HII
4101 Washington Ave. • Newport News, VA 23607
www.HII.com
Page 7 of 12
HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (UNAUDITED)
September 30, December 31,
($ in millions) 2026 2025
──────────────────────────────────────────────────────────────────────────────
Assets
Current Assets
Cash and cash $ 387 $ 774
equivalents
Accounts
receivable, net
of allowance
for expected
credit losses 361 339
of $3 million
as of 2026 and
$2 million as
of 2025
Contract assets 2,125 1,758
Inventoried 240 219
costs
Income taxes 250 284
receivable
Prepaid
expenses and 100 77
other current
assets
Total current 3,463 3,451
assets
Property,
plant, and
equipment, net
of
accumulated
depreciation of 3,849 3,726
$2,892
million as of
2026 and $2,754
million as
of 2025
Operating lease 275 267
assets
Goodwill 2,650 2,650
Other
intangible
assets, net of
accumulated
amortization of 631 694
$1,285
million as of
2026 and $1,222
million as
of 2025
Pension plan 1,668 1,544
assets
Miscellaneous 444 417
other assets
Total assets $ 12,980 $ 12,749
Liabilities and
Stockholders'
Equity
Current
Liabilities
Trade accounts $ 709 $ 556
payable
Accrued
employees’ 403 443
compensation
Current portion
of
postretirement 119 119
plan
liabilities
Current portion
of workers’ 214 217
compensation
liabilities
Contract 780 1,220
liabilities
Other current 513 490
liabilities
Total current 2,738 3,045
liabilities
Long-term debt 2,704 2,700
Pension plan 155 155
liabilities
Other
postretirement 187 200
plan
liabilities
Workers’
compensation 437 442
liabilities
Long-term
operating lease 225 223
liabilities
Deferred tax 694 572
liabilities
Other long-term 348 339
liabilities
Total 7,488 7,676
liabilities
Commitments and
Contingencies
Stockholders’
Equity
Common stock,
$0.01 par
value;
150,000,000
shares
authorized;
53,990,247
shares issued
and 39,405,538 1 1
shares
outstanding as
of 2026, and
53,826,236
shares issued
and 39,241,527
shares
outstanding as
of 2025
Additional 2,096 2,087
paid-in capital
Retained 5,893 5,487
earnings
Treasury stock -2,449 -2,449
Accumulated
other -49 -53
comprehensive
loss
Total
stockholders’ 5,492 5,073
equity
Total
liabilities and $ 12,980 $ 12,749
stockholders’
equity
HII
4101 Washington Ave. • Newport News, VA 23607
www.HII.com
Page 8 of 12
HUNTINGTON INGALLS INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine Months Ended September
($ in millions) 30
Operating Activities: 2026 2025
──────────────────────────────────────────────────────────────────────────────
Net earnings $ 574 $ 446
Adjustments to reconcile
net cash
provided by operating
activities:
Depreciation 167 164
Amortization of purchased 63 78
intangibles
Stock-based compensation 47 43
Deferred income taxes 120 121
Gain on investments in
marketable -18 -28
securities
Other non-cash 17 15
transactions, net
Change in
Accounts receivable -22 -162
Contract assets -367 -186
Inventoried costs -21 -13
Prepaid expenses and -2 -23
other assets
Accounts payable and -327 207
accruals
Retiree benefits -132 -116
Net cash provided by
operating 99 546
activities
Investing Activities:
Capital expenditures
Capital expenditure -288 -268
additions
Grant proceeds for 7 6
capital expenditures
Proceeds from sale of — 5
investments
Acquisitions of — -132
businesses
Other investing 1 2
activities, net
Net cash used in -280 -387
investing activities
Financing Activities:
Repayment of long-term — -500
debt
Proceeds from line of 17 —
credit borrowings
Repayment of line of -17 —
credit borrowings
Dividends paid -163 -159
Employee taxes on certain
share-based -43 -14
payment arrangements
Other financing — -5
activities, net
Net cash used in -206 -678
financing activities
Change in cash and cash -387 -519
equivalents
Cash and cash
equivalents, beginning of 774 831
period
Cash and cash
equivalents, end of $ 387 $ 312
period
Supplemental Cash Flow
Disclosure
Cash paid for income
taxes (net of $ 19 $ 71
refunds)
Cash paid for interest $ 96 $ 86
Non-Cash Investing and
Financing
Activities
Capital expenditures
accrued in accounts $ 14 $ 7
payable
HII
4101 Washington Ave. • Newport News, VA 23607
www.HII.com
Page 9 of 12
Exhibit B: Non-GAAP Measures Definitions & Reconciliations
This earnings release contains non-GAAP (accounting principles generally
accepted in the United States of America) financial measures as defined by SEC
Regulation G and indicated by a footnote in the text of this release.
Definitions for the non-GAAP measures, and related reconciliations, are provided
below. Because not all companies use identical definitions or calculations, our
presentation of these measures may not be comparable to similarly titled
measures of other companies.
Segment Operating Income and Segment Operating Margin. We internally manage our
operations by reference to segment operating income and segment operating margin
and use these measures to evaluate our core operating performance. We believe
that segment operating income and segment operating margin reflect additional
ways of viewing aspects of our operations that, when viewed with our GAAP
results, provide a more complete understanding of factors and trends affecting
our business. These measures should be considered in addition to, and not as
alternatives for, operating income and operating margin or any other performance
measure presented in accordance with GAAP.
Segment operating income
is defined as operating income for the relevant segment(s) before the Operating
FAS/CAS Adjustment and non-current state income taxes.
Segment operating margin
is defined as segment operating income as a percentage of sales and service
revenues.
Shipbuilding operating margin, Mission Technologies EBITDA and Mission
Technologies EBITDA margin. We use shipbuilding operating margin, Mission
Technologies EBITDA and Mission Technologies EBITDA margin to evaluate our core
operating performance. We believe these measures reflect additional ways of
viewing aspects of our operations that, when viewed with our GAAP results,
provide a more complete understanding of factors and trends affecting our
business. These measures should be considered in addition to, and not as
alternatives for, operating income and operating margin or any other performance
measure presented in accordance with GAAP.
Shipbuilding operating margin
is defined as the combined segment operating income of our Newport News
Shipbuilding segment and Ingalls Shipbuilding segment as a percentage of
shipbuilding revenue. Shipbuilding revenue is the sum of revenues of our Newport
News Shipbuilding segment and Ingalls Shipbuilding segment.
Mission Technologies EBITDA
is defined as Mission Technologies segment operating income before interest
expense, income taxes, depreciation, and amortization.
Mission Technologies EBITDA margin
is defined as Mission Technologies EBITDA as a percentage of Mission
Technologies revenues.
Free cash flow.
We use free cash flow as a key operating metric in assessing the performance of
our business and as a key performance measure in evaluating management
performance and determining incentive compensation. We believe free cash flow is
an important liquidity measure that may be useful to investors and other users
of our financial statements because it provides insight into our current and
period-to-period performance and our ability to generate cash from continuing
operations. Free cash flow has limitations as an analytical tool and should not
be considered in isolation from, or as a substitute for, net income as a measure
of our performance or net cash provided by operating activities as a measure of
our liquidity.
Free cash flow
is defined as net cash provided by (used in) operating activities less capital
expenditures net of related grant proceeds.
In reliance upon Item 10(e)(1)(i)(B) of Regulation S-K, reconciliations of
forward-looking GAAP and non-GAAP measures are not provided because of the
unreasonable effort associated with providing such reconciliations due to the
variability in the occurrence and the amounts of certain components of GAAP and
non-GAAP measures. For the same reasons, we are unable to address the
significance of the unavailable information, which could be material to future
results.
HII
4101 Washington Ave. • Newport News, VA 23607
www.HII.com
Page 10 of 12
Reconciliations of Segment Operating Income and Segment Operating Margin
Three Nine
($ Mont… Mon…
in Ended Sept… End… Sept…
mil… 2026 30 2025 2026 30 2025
──────────────────────────────────────────────────────────────────────────────
Ing… $ 876 $ 828 $ 2,446 $ 2,1…
rev…
New…
News 1,910 1,617 5,424 4,6…
rev…
Mis…
Tec… 792 787 2,300 2,3…
rev…
Int… -41 -40 -116 -110
eli…
Sal…
and 3,537 3,192 10,0… 9,0…
Ser…
Rev…
Ope… 246 161 611 485
Inc…
Ope…
FAS… 12 9 29 25
Adj…
Non…
sta… 4 9 18 12
inc…
tax…
Seg…
Ope… 262 179 658 522
Inc…
As a
per…
of
sal… 7.4 % 5.6 % 6.5 % 5.8 %
and
ser…
rev…
Ing…
seg… 59 65 166 165
ope…
inc…
As a
per…
of 6.7 % 7.9 % 6.8 % 7.5 %
Ing…
rev…
New…
News
seg… 132 80 331 247
ope…
inc…
As a
per…
of 6.9 % 4.9 % 6.1 % 5.4 %
New…
News
rev…
Mis…
Tec…
seg… 71 34 161 110
ope…
inc…
As a
per…
of 9.0 % 4.3 % 7.0 % 4.8 %
Mis…
Tec…
rev…
Reconciliation of Free Cash Flow
Three Nine
Months Months
($ in Ended Septem… Ended Septem…
milli… 2026 30 2025 2026 30 2025
──────────────────────────────────────────────────────────────────────────────
Net
cash
provi… $ 520 $ 118 $ 99 $ 546
by
opera…
activ…
Less
capit…
expen…
Capit…
expen… -95 -105 -288 -268
addit…
Grant
proce…
for 4 3 7 6
capit…
expen…
Free
cash $ 429 $ 16 $ -182 $ 284
flow
HII
4101 Washington Ave. • Newport News, VA 23607
www.HII.com
Page 11 of 12
Reconciliation of Mission Technologies EBITDA and EBITDA Margin
Three Nine
($ Mont… Mont…
in Ended Sept… Ended Sept…
mil… 2026 30 2025 2026 30 2025
──────────────────────────────────────────────────────────────────────────────
Mis…
Tec…
sal… $ 792 $ 787 $ 2,300 $ 2,313
and
ser…
rev…
Mis…
Tec…
seg… $ 71 $ 34 $ 161 $ 110
ope…
inc…
Mis…
Tec… 3 3 9 9
dep…
exp…
Mis…
Tec… 18 22 53 67
amo…
exp…
Mis…
Tec…
sta… 2 2 6 6
tax
exp…
Mis…
Tec… $ 94 $ 61 $ 229 $ 192
EBI…
Mis…
Tec… 11.9 % 7.8 % 10.0 % 8.3 %
EBI…
mar…
HII
4101 Washington Ave. • Newport News, VA 23607
www.HII.com
Page 12 of 12