MAY 5, 2016 — Huntington Ingalls Industries (NYSE:HII) reported first quarter 2016 revenues of $1.76 billion, up 12.3 percent from the same period last year. Diluted earnings per share in the quarter was $2.87, compared to diluted earnings per share of $1.79 in the same period of 2015, and surpassed Zacks Equity Research analysts' consensus by 36%.
Reported earnings also surged 60.3% from in the year-ago figure of $1.79. The upside was primarily driven by strong contribution from its Ingalls Shipbuilding division.
Total revenue in the first quarter was $1,763 million, ahead of the Zacks Consensus Estimate of $1,591 million and 12.3% higher than the $1,570 million total inthe same quarter of last year
"Operating results in the quarter were strong, as Ingalls continued to execute well on its programs," said Mike Petters, HII's president and CEO. "As we progress through this challenging period at Newport News, with the impending three carrier deliveries, we are working diligently with our Navy customer to bring these ships to completion."
Ingalls Shipbuilding revenues for the first quarter increased $117 million, or 24.9 percent, from the same period in 2015 due to higher revenues in Surface Combatants and Amphibious Assault Ships, partially offset by lower revenues in the Legend-class National Security Cutter (NSC) program. Higher Surface Combatant revenues were primarily due to increased volume on DDG-121 Frank E. Petersen, Jr. Higher Amphibious Assault Ships revenues were primarily due to increased volumes on LPD-28 Ft. Lauderdale and LHA-7 Tripoli. Lower NSC program revenues were primarily due to the delivery of NSC-5 USCGC James in 2015, partially offset by increased volume on NSC-8 Midgett.
Ingalls operating income for the first quarter was $82 million, an increase of $37 million from the same period last year. Operating margin was 14.0 percent for the quarter, compared to 9.6 percent in the same period last year. These increases were primarily due to performance improvement and higher risk retirement on the LPD and DDG programs.
Newport News Shipbuilding revenues for the first quarter increased $92 million, or 8.7 percent, from the same period in 2015, primarily driven by higher revenues in Energy and Submarines, partially offset by lower revenues in Aircraft Carriers. Higher Energy revenues were due to increased volumes and the resolution of outstanding contract changes on a commercial contract, partially offset by decreased volumes associated with environmental remediation programs. Higher Submarines revenues related to the SSN-774 Virginia-class submarine (VCS) program were due to increased volumes on Block IV boats, partially offset by decreased volumes on Block III boats. Lower Aircraft Carriers revenues were due to decreased volumes on the construction contract for CVN-78 Gerald R. Ford and the execution contract for the CVN-72 USS Abraham Lincoln refueling and complex overhaul (RCOH), partially offset by increased volume on the construction contract for CVN-79 John F. Kennedy.
Newport News operating income for the first quarter was $89 million, a decrease of $4 million from the same period last year. Operating margin was 7.7 percent for the quarter, compared to 8.8 percent in the same period last year. These decreases were primarily due to lower risk retirement on the VCS program, lower volume on the execution contract for the CVN-72 USS Abraham Lincoln RCOH and lower performance on CVN-78 Gerald R. Ford, partially offset by higher performance on fleet support services.