Huntington Ingalls Industries (HII) Q1 2026 earnings summary

Executive summary

• First quarter 2026 revenues reached $3.1 billion, up 13.4% year-over-year, with growth across all major segments and strong shipbuilding demand.

• Net earnings were $149 million, with diluted EPS of $3.79, unchanged from the prior year.

• Operational initiatives focused on throughput improvement, workforce expansion, and facility investment, including hiring over 1,600 shipbuilders and graduating nearly 200 apprentices.

• Major operational milestones included builder's sea trials for John F. Kennedy (CVN 79) and new long-term labor agreements.

• Backlog reached $54.0 billion, with $4.0 billion in new contract awards.

Financial highlights

• Consolidated Q1 revenues were $3.1 billion, up 13.4% year-over-year; Newport News revenues rose 19.3% to $1.7 billion, Ingalls up 13.8% to $725 million, and Mission Technologies up 1.8% to $748 million.

• Segment operating income was $172 million (5.6% margin), nearly flat year-over-year; consolidated operating income was $155 million (5.0% margin), down from 5.9%.

• Net earnings were $149 million; free cash flow was negative $461 million, similar to Q1 2025.

• Interest expense declined to $22 million from $28 million, reflecting lower outstanding debt.

• Effective tax rate was 20.7% in Q1, with full-year guidance at 17%.

Outlook and guidance

• FY26 revenue guidance reaffirmed: shipbuilding $9.7–$9.9 billion, Mission Technologies $3.0–$3.2 billion; shipbuilding margin expected 5.5%–6.5%, Mission Technologies ~5%.

• Q2 shipbuilding revenue expected at $2.4 billion, with operating margins between 5.7% and 6%.

• Free cash flow for Q2 projected between negative $100 million and positive $100 million; FY26 free cash flow projected at $500–$600 million.

• Medium-term revenue CAGR targeted at ~6%, aiming for $16B+ enterprise revenue by 2030.

• 2026 tax rate guidance remains at 17%, with a temporary Q2 rate of 21%.