HII Reports Third Quarter 2026 Results
HUNTINGTON INGALLS INDUSTRIES, INC. (HII) filed an SEC Form 8-K — Results of Operations and Financial Condition. 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 t
How this was made
The 30-second read
Why it matters
The earnings beat and raised revenue guidance are likely to attract buying interest, especially from investors focused on defense and aerospace.
Market read
The release provides fresh, material data that can move HII's stock and influences the broader defense sector.
What to watch
Potential execution risk on large shipbuilding contracts could temper upside.
HII Reports Third Quarter 2026 Results
Third-quarter revenue, operating income, net earnings, diluted earnings per share and free cash flow increased from the third quarter of 2025, while the company raised FY26 shipbuilding revenue guidance and reaffirmed its FY26 free cash flow outlook.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Sales and service revenues, three months ended September 30GAAP | $3.54B | – | 10.8% |
| Product sales, three months ended September 30GAAP | $2.44B | – | – |
| Service revenues, three months ended September 30GAAP | $1.1B | – | – |
| Operating income, three months ended September 30GAAP | $246M | – | 52.8% |
| Operating margin, three months ended September 30GAAP | 7.0% | – | 191 bps |
| Segment operating income, three months ended September 30non-GAAP | $262M | – | 46.4% |
| Segment operating margin, three months ended September 30non-GAAP | 7.4% | – | 180 bps |
| Net earnings, three months ended September 30GAAP | $217M | – | 49.7% |
| Diluted earnings per share, three months ended September 30GAAP | $5.48 | – | 48.9% |
| Basic earnings per share, three months ended September 30GAAP | $5.49 | – | – |
| Net cash provided by operating activities, three months ended September 30GAAP | $520M | – | – |
| Free cash flow, three months ended September 30non-GAAP | $429M | – | – |
| New contract awards, third quarter 2026other | $32.4B | – | – |
| Year-to-date contract awardsother | $43.1B | – | – |
| Sales and service revenues, nine months ended September 30GAAP | $10.05B | – | 11.6% |
| Operating income, nine months ended September 30GAAP | $611M | – | 26.0% |
| Operating margin, nine months ended September 30GAAP | 6.1% | – | 69 bps |
| Segment operating income, nine months ended September 30non-GAAP | $658M | – | 26.1% |
| Segment operating margin, nine months ended September 30non-GAAP | 6.5% | – | 75 bps |
| Net earnings, nine months ended September 30GAAP | $574M | – | 28.7% |
| Diluted earnings per share, nine months ended September 30GAAP | $14.53 | – | 28.0% |
| Net cash provided by operating activities, nine months ended September 30GAAP | $99M | – | – |
| Free cash flow, nine months ended September 30non-GAAP | −$182M | – | – |
| Mission Technologies EBITDA, three months ended September 30non-GAAP | $94M | – | – |
| Mission Technologies EBITDA margin, three months ended September 30non-GAAP | 11.9% | – | – |
| Mission Technologies EBITDA, nine months ended September 30non-GAAP | $229M | – | – |
| Mission Technologies EBITDA margin, nine months ended September 30non-GAAP | 10.0% | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Ingalls ShipbuildingHigher volumes in amphibious assault ships. | $876M | – | 5.8% |
| Newport News ShipbuildingHigher volumes in submarines and aircraft carriers. | $1.91B | – | 18.1% |
| Mission TechnologiesHigher volumes in Unmanned Systems, partially offset by lower volumes in Global Security. | $792M | – | 0.6% |
FY26 outlook
- Tax rate~17%
- NoteShipbuilding revenue between $10.5 and $10.7 billion
- NoteShipbuilding operating margin between 6.0% and 6.5%
- NoteMission Technologies revenue between $3.0 and $3.2 billion
- NoteMission Technologies segment operating margin of approximately 6%
- NoteMission Technologies EBITDA margin of approximately 9%
- NoteOperating FAS/CAS Adjustment ($40M)
- NoteNon-current State Income Tax Expense ($27M)
- NoteInterest Expense ($100M)
- NoteNon-operating Retirement Benefit $213M
- NoteDepreciation & Amortization ~$330M
- NoteCapital Expenditures ~$500M
- NoteFree cash flow between $500 and $600 million
- NoteCumulative FY26 & FY27 free cash flow target of between $1.2 billion and $1.3 billion
Capital returns
- Dividends declared per share, three months ended September 30: $1.38, compared to $1.35
- Dividends declared per share, nine months ended September 30: $4.14, compared to $4.05
- Dividends paid, nine months ended September 30: $(163) million, compared to $(159) million
What drove it
- Third-quarter revenue growth was driven by growth at Newport News Shipbuilding and Ingalls Shipbuilding.
- Newport News Shipbuilding operating income increased on contract adjustments and incentives in the Virginia-class submarine program and higher submarine and aircraft carrier volumes.
- Mission Technologies operating income increased due to a successful milestone achievement, higher Unmanned Systems volumes and higher equity income from nuclear and environmental joint ventures.
- Mission Technologies achieved third quarter 2026 book-to-bill of 2.4x.
- Third-quarter contract awards included contracts for Block VI Virginia-class and Build II Columbia-class submarines, as well as a $2.2 billion Mission Technologies contract for U.S. surveillance and intelligence capabilities for the Western Hemisphere.
Concerns
- Ingalls Shipbuilding segment operating income decreased to $59 million from $65 million and segment operating margin declined to 6.7% from 7.9%, primarily driven by lower performance in surface combatants.
- Mission Technologies revenue increased only 0.6% to $792 million, with higher Unmanned Systems volumes partially offset by lower Global Security volumes.
- Nine-month free cash flow was $(182) million, compared to $284 million, and nine-month net cash provided by operating activities was $99 million, compared to $546 million.
- Cash and cash equivalents were $387 million as of September 30, 2026, compared to $774 million as of December 31, 2025.
What to watch
- Execution against FY26 shipbuilding revenue guidance of between $10.5 and $10.7 billion and shipbuilding operating margin guidance of between 6.0% and 6.5%.
- Whether Newport News Shipbuilding sustains contract adjustments, incentives and volume growth in the Virginia-class submarine program.
- Recovery in Ingalls Shipbuilding surface combatant performance.
- Mission Technologies progress toward revenue between $3.0 and $3.2 billion, segment operating margin of approximately 6%, and EBITDA margin of approximately 9%.
- Conversion of cash flow toward FY26 free cash flow between $500 and $600 million and the cumulative FY26 & FY27 free cash flow target of between $1.2 billion and $1.3 billion.
Balance sheet and cash flow
- Cash and cash equivalents as of September 30, 2026: $387 million, compared to $774 million as of December 31, 2025
- Long-term debt as of September 30, 2026: $2,704 million, compared to $2,700 million as of December 31, 2025
- Contract assets as of September 30, 2026: $2,125 million, compared to $1,758 million as of December 31, 2025
- Contract liabilities as of September 30, 2026: $780 million, compared to $1,220 million as of December 31, 2025
- Capital expenditure additions, nine months ended September 30: $(288) million, compared to $(268) million
- Net cash used in investing activities, nine months ended September 30: $(280) million, compared to $(387) million
- Net cash used in financing activities, nine months ended September 30: $(206) million, compared to $(678) million
Analysis
HII reported record third-quarter revenues of $3.5 billion. Sales and service revenues were $3,537 million, up 10.8% from $3,192 million, with growth at Newport News Shipbuilding and Ingalls Shipbuilding. Operating income rose to $246 million from $161 million, operating margin increased to 7.0% from 5.0%, and net earnings increased to $217 million from $145 million. Diluted earnings per share increased to $5.48 from $3.68.
Newport News Shipbuilding was the principal growth and profit contributor. Revenue increased 18.1% to $1,910 million and segment operating income increased 65.0% to $132 million, lifting margin to 6.9% from 4.9%. The company attributed the operating-income improvement to Virginia-class submarine contract adjustments and incentives and to higher submarine and aircraft carrier volumes. Ingalls Shipbuilding revenue increased 5.8% to $876 million, but segment operating income declined to $59 million from $65 million and margin fell to 6.7% from 7.9%, reflecting lower surface combatant performance.
Mission Technologies revenue was essentially flat, increasing 0.6% to $792 million, as higher Unmanned Systems volume was partly offset by lower Global Security volume. Profitability improved materially: segment operating income rose to $71 million from $34 million, margin increased to 9.0% from 4.3%, and EBITDA margin increased to 11.9% from 7.8%. The release cited a successful milestone achievement, Unmanned Systems volume and higher equity income from nuclear and environmental joint ventures. The segment also reported third-quarter book-to-bill of 2.4x.
Cash generation was strong in the quarter, with $520 million of operating cash flow and $429 million of free cash flow, compared with $118 million and $16 million, respectively. However, year-to-date operating cash flow was $99 million versus $546 million and year-to-date free cash flow was $(182) million versus $284 million. Cash and cash equivalents declined to $387 million at September 30, 2026 from $774 million at December 31, 2025, while long-term debt was $2,704 million compared with $2,700 million.
The company raised FY26 shipbuilding revenue guidance to between $10.5 and $10.7 billion from $10.2B - $10.4B. It reaffirmed shipbuilding operating margin guidance of 6.0% - 6.5% and FY26 free cash flow guidance of $500M - $600M. Mission Technologies revenue guidance remained $3.0B - $3.2B, while Mission Technologies segment operating margin guidance increased to approximately 6% from approximately 5% and EBITDA margin guidance increased to approximately 9% from 8.4% - 8.6%.
Management, verbatim
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.
Chris Kastner, HII's president and CEO
Not in the filing
stated, not guessed- Prior-quarter comparisons for reported operating metrics
- Gross margin and gross-margin guidance
- Share repurchases during the reported period
- A directly comparable reported actual for each FY26 guided metric, as the release reports third-quarter and nine-month actual results rather than full-year FY26 actual results
AlphAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
HII (NYSE:HII) filed a Form 8‑K reporting its third‑quarter 2026 financial results and updated guidance.
Ticker impact
HII reported Q3 2026 results with record $3.5B revenue, $217M earnings and raised FY26 shipbuilding revenue guidance to $10.5‑$10.7B.
likely upward pressure as investors price in higher revenue outlook
Revenue and earnings both exceeded prior year, and the company raised its shipbuilding revenue guidance, which typically supports a price rally.
Market effects
Boosts outlook for U.S. defense and shipbuilding sector.
Positive for defense contractors in the United States.
Limited to defense and industrial investors globally.
Counterpoint
If the raised guidance is already priced in, the stock may face a short‑term pull‑back.
Key entities
- companyHII
U.S. defense contractor and shipbuilder.
