HII Reports 10.9% Growth in Q2 2026 Revenue
HII reported fiscal 2026 Q2 revenue of $3.4 billion, up 10.9% year over year, and net earnings of $208 million, or diluted EPS of $5.27. It booked $6.7 billion in new contract awards, lifting backlog to about $57.3 billion. The company reiterated 2026 free cash flow guidance of $500 million to $600 million and raised shipbuilding revenue guidance to $10.2 billion to $10.4 billion.
How this was made
The 30-second read
Why it matters
Q2 results show double-digit revenue growth and large new contract awards, while management raised full-year shipbuilding revenue and operating margin guidance. However, operating cash flow and free cash flow were negative in the quarter, highlighting execution and cash conversion risk.
Market read
Traders can update models using the fresh earnings datapoints, raised shipbuilding guidance, and the $76.6B combined contract modification value for Virginia Block VI and Columbia-class programs.
What to watch
Backlog and awards are supportive, but the article does not quantify margin realization versus guidance or timing of cash conversion, which can dominate near-term valuation.
Background
HII is a US military shipbuilder with three main segments: Mission Technologies, Newport News Shipbuilding, and Ingalls Shipbuilding.
Ticker impact
HII reported $3.4B Q2 2026 revenue (+10.9% YoY), $6.7B new awards, and ~$57.3B backlog, plus updated shipbuilding guidance.
Likely positive bias for the stock on guidance and backlog strength, tempered by negative free cash flow.
The article discloses multiple primary datapoints: revenue growth, large contract awards/backlog, raised shipbuilding revenue and operating margin ranges, and a reiterated full-year FCF range despite negative quarterly FCF.
Market effects
Supports the defense shipbuilding demand narrative via large submarine and carrier program contract modifications and higher throughput targets.
Could reinforce regional shipyard and supplier employment expectations tied to expanded distributed shipbuilding and hiring.
Limited direct global linkage beyond sustaining US Navy platform build rates and unmanned systems development.
Counterpoint
Negative free cash flow in the quarter and operating cash drag could signal working-capital pressure that may delay equity-friendly outcomes despite strong backlog.
Key entities
- public_companyHII
Reported Q2 2026 revenue of $3.4B (+10.9% YoY), $6.7B new contract awards, ~$57.3B backlog, and raised shipbuilding guidance; also disclosed negative quarterly free cash flow.
- executiveChris Kastner
HII CEO who stated plans to deliver five ships in the next 12 months and raised full-year shipbuilding revenue and operating margin guidance.
