HII Posts Record Revenue and Raises Shipbuilding Outlook

HII, the largest U.S. military shipbuilder, raised its 2026 shipbuilding revenue forecast on Thursday after a record third quarter in which it booked $32.4 billion of new contracts and lifted earnings per share nearly 49%.

The company now expects full-year shipbuilding revenue of $10.5 billion to $10.7 billion, up from $10.2 billion to $10.4 billion, according to the earnings release it filed with an 8-K on Thursday. It reaffirmed its shipbuilding operating margin outlook of 6.0% to 6.5% and its free cash flow forecast of $500 million to $600 million.

Record revenue, wider margins

Third-quarter revenue rose 10.8% to a record $3.537 billion, driven by growth at Newport News Shipbuilding and Ingalls Shipbuilding. Net earnings climbed to $217 million, or $5.48 a diluted share, from $145 million, or $3.68, a year earlier.

Operating margin widened to 7.0% from 5.0%, and operating income rose 52.8% to $246 million. Cash generation improved sharply: operating cash flow was $520 million and free cash flow was $429 million, compared with $118 million and $16 million a year earlier.

"The significant awards we received during the quarter have now secured approximately 90 percent of our expected shipbuilding revenue through 2030," President and CEO Chris Kastner said in the release. "With that visibility, our focus is squarely on shipbuilding execution."

Submarines drive Newport News

Newport News Shipbuilding revenue jumped 18.1% to $1.9 billion on higher submarine and aircraft carrier volumes. Its segment operating income rose to $132 million from $80 million, and its margin improved to 6.9% from 4.9%, helped by contract adjustments and incentives on the Virginia-class submarine program.

During the quarter the yard won contracts to build Block VI Virginia-class and Build II Columbia-class submarines and achieved preliminary acceptance of the aircraft carrier John F. Kennedy.

Ingalls Shipbuilding revenue rose 5.8% to $876 million on amphibious assault ships, but its operating income slipped to $59 million from $65 million because of lower performance in surface combatants.

Unmanned systems lift Mission Technologies

Mission Technologies revenue was roughly flat at $792 million, but segment operating income more than doubled to $71 million, and margin rose to 9.0% from 4.3%. HII credited a milestone achievement and higher volumes in unmanned systems, plus higher income from nuclear and environmental joint ventures.

The unit posted a book-to-bill ratio of 2.4 times, won a $2.2 billion surveillance and intelligence contract for the Western Hemisphere, and expanded its unmanned production facility by 25%.

HII raised its 2026 outlook for Mission Technologies segment operating margin to about 6% from about 5%, while keeping that unit's revenue forecast at $3.0 billion to $3.2 billion.

Year-to-date

Through nine months, revenue rose 11.6% to $10.054 billion, and diluted EPS reached $14.53, up from $11.35. Year-to-date contract awards totaled $43.1 billion. HII also reiterated a cumulative free cash flow target of $1.2 billion to $1.3 billion for 2026 and 2027 combined.

Sources

1. HII Form 8-K with third-quarter 2026 earnings release (Exhibit 99.1), filed Oct. 29, 2026 (accession 0001501585-26-000054)

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