Huntington Ingalls

Huntington Ingalls (HII) is the largest military shipbuilder in the US. Newport News Shipbuilding in Virginia is the only US yard that builds nuclear aircraft carriers, and it builds nuclear submarines with General Dynamics' Electric Boat. It also refuels and overhauls carriers. Ingalls Shipbuilding in Mississippi builds amphibious assault ships, destroyers and Coast Guard cutters.

Mission Technologies sells unmanned systems, C6ISR, cyber, training and nuclear services, and it had $792 million of revenue in Q3 2026. The US government is almost the only customer, through long contracts that are mostly fixed-price incentive or cost-plus. HII makes money from the margin on these contracts, and the margin moves with its cost performance. Backlog was $86.2 billion at September 30, 2026, and the company has about 46,000 employees.

HII trades at a discount because investors doubt that it can turn its large backlog into profit and cash. Its shipbuilding margin is low, with guidance of 6.0% to 6.5% for 2026, because labor, supply chain and inflation raise the cost of ships that it builds under long contracts. Free cash flow was negative in Q1 and Q2 2026. It was positive $429 million in Q3, but still negative $182 million for the first nine months.

The full-year target of $500 million to $600 million therefore depends on Q4. Demand is strong: backlog grew to $86.2 billion at September 30, 2026, after $32.4 billion of new awards in Q3, including the next Virginia-class and Columbia-class submarine contracts. HII says that these awards secure about 90% of its expected shipbuilding revenue through 2030. Investors want proof that this demand gives better margins.

In Q3, net favorable contract adjustments of $76 million, mostly on the Columbia class, lifted the shipbuilding margin above the guided range. For the gap to close, HII must reach its 15% shipbuilding throughput goal for 2026, keep the shipbuilding margin in the guided range without large unfavorable contract adjustments, reach $500 million to $600 million of free cash flow for 2026 and reach its target of $1.2 billion to $1.3 billion for 2026 and 2027 together. The full-year 2026 results and the 2027 outlook, expected in early 2027, are the main test of the cash target. Higher margins need several years of better labor productivity, so the gap probably closes slowly, over two to three years.

The main risk is new cost growth on carriers or submarines.

1. Oct 29, 2026Passed

   Q3 2026 results: free cash flow and shipbuilding marginPositive free cash flow, a shipbuilding margin of 6.0% to 6.5% and the full-year free cash flow target kept pass; another quarter of negative cash flow or a cut to the target fails.Outcome: Free cash flow was positive $429 million, the shipbuilding margin was about 6.9%, and HII kept its 2026 free cash flow target of $500 million to $600 million.
2. Jan 29, 2027 · est.Pending

   Full-year 2026 results and 2027 outlookFree cash flow of $500 million to $600 million for 2026, a 2027 outlook in line with the $1.2 billion to $1.3 billion two-year cash target and a higher shipbuilding margin pass; a cash shortfall or lower margin guidance fails.
3. May 2027 · est.Pending

   Q1 2027 results: throughput and contract adjustmentsHigher shipbuilding output with few unfavorable contract adjustments passes; new cost growth on carriers or submarines fails.

Every passed and failed checkpoint across all picks

• October 29, 2026HII reported Q3 2026 results. Revenue was $3.54 billion, up 10.8%. The operating margin rose to 7.0% from 5.0%, and diluted EPS was $5.48, up from $3.68. Free cash flow was positive $429 million, after two negative quarters. Net favorable contract adjustments were $76 million, including a favorable adjustment of $65 million on the Columbia class. New awards were $32.4 billion, and backlog was $86.2 billion.
• October 29, 2026HII raised its 2026 shipbuilding revenue guidance to $10.5 billion to $10.7 billion and kept the shipbuilding margin guidance of 6.0% to 6.5%. It kept its 2026 free cash flow target of $500 million to $600 million, and it set a new target of $1.2 billion to $1.3 billion of free cash flow for 2026 and 2027 together. The CEO said that the Q3 awards secure about 90% of the expected shipbuilding revenue through 2030.
• October 19, 2026The board elected Mike Petters, HII's CEO from 2011 to 2022, as a director. The board grew to twelve members.

Last earnings

October 29, 2026 (8-K on sec.gov)

Next earnings

Expected about January 29, 2027. The company has not confirmed the date.

• 10-QQuarterly report for the period ended Sep 30, 2026Filed October 29, 2026 · hii-20260930
• 8-KEarnings releaseFiled October 29, 2026 · Press release and exhibits
• 8-KChange of directors or officersFiled October 20, 2026 · hii-20261019
• 10-QQuarterly report for the period ended Jun 30, 2026Filed July 30, 2026 · hii-20260630
• 8-KEarnings releaseFiled July 30, 2026 · Press release and exhibits
• 10-QQuarterly report for the period ended Mar 31, 2026Filed May 5, 2026 · hii-20260331
• 8-KEarnings releaseFiled May 5, 2026 · Press release and exhibits
• 8-KShareholder vote resultsFiled May 1, 2026 · hii-20260429
• 10-KAnnual report for the period ended Dec 31, 2025Filed February 5, 2026 · hii-20251231
• 8-KEarnings releaseFiled February 5, 2026 · Press release and exhibits

Every filing on SEC EDGAR (CIK 1501585)

• Cost growth on long ship contracts lowers margins. HII records the effect of new cost estimates at once, as cumulative catch-up adjustments. In Q3 2026, gross unfavorable adjustments were $156 million. Gross favorable adjustments of $232 million, including $65 million on the Columbia class, more than offset them. In Q2 2026, an unfavorable adjustment of $48 million on the overhaul of USS George Washington (CVN 73) lowered profit.
• Free cash flow was negative $461 million in Q1 2026, negative $150 million in Q2 2026 and positive $429 million in Q3 2026. For the first nine months, it was negative $182 million, so the full-year target of $500 million to $600 million needs about $680 million to $780 million in Q4. A delay in Navy payments or milestones can move cash into 2027.
• Ship output depends on enough skilled workers and on suppliers. HII must reach its goal of 15% more shipbuilding throughput in 2026. A shortage of workers or late parts from suppliers slows work and raises costs.
• Almost all revenue comes from the US government. Changes in Navy budgets and shipbuilding plans, a continuing resolution or a government shutdown can delay new contracts and payments.
• Cash was $387 million at September 30, 2026, and only $12 million at June 30, 2026. HII depends on its operating cash flow and on its $1.7 billion credit facility and commercial paper program during the year.

Debt is unsecured senior notes plus $21 million of revenue bonds, with no amount drawn on the credit facility or the commercial paper program at September 30, 2026. HII issued and repaid no notes in the first nine months of 2026. Read more

Yield at the current rate

1.8% (current annual rate, at today’s price)

Dividend yield

1.8% (last 12 months, at today’s price of $313.96)

Paid per share

$5.52 in the last 12 months (4 payments)

Current annual rate

$5.52 ($1.38 × 4 a year)

Payout ratio

35% of the last fiscal year’s earnings (the year that ended December 31, 2025)

Latest ex-dividend date

August 28, 2026, $1.38 per share

Dividends per share by year

From 2020 to 2025, the dividend grew by about 5.1% a year. From 2015 to 2025, the dividend grew by about 12.3% a year.

Source: company filings and market data, read on November 13, 2026. The ex-dividend date is the first day a buyer no longer gets the next payment.