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Huntington Ingalls Industries Inc HII

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Morningstar’s Analysis

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Huntington Ingalls Posts Strong Q4 Due to Accelerating Aircraft Carrier Revenue; Maintain $191 FVE

Burkett Huey, CFA Equity Analyst

Analyst Note

| Burkett Huey, CFA |

Narrow-moat-rated Huntington Ingalls reported a strong end to fiscal 2020, with earnings per share of $6.15 beating FactSet consensus of $4.56 due to accelerated revenue on two aircraft carriers. We’re maintaining our $191 fair value estimate, as we have increased our shipbuilding revenue outlook for the firm, but the additional free cash flow is offset by worse-than-anticipated pension and working capital headwinds.

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Company Profile

Business Description

Huntington Ingalls Industries Inc was created from the spin-off of Northrop Grumman's shipbuilding business. The company is the largest independent military shipbuilder. The company has three segments, two of which are shipyards. Ingalls produces non-nuclear-powered ships, particularly the America-class amphibious assault ship and the Arleigh Burke-class destroyer. The Newport News segment produces nuclear-powered ships, is the sole-source contractor for the Gerald R. Ford-class aircraft carrier, and is a major subcontractor to the Columbia-class attack submarine. The company's technical solutions segment produces uncrewed undersea vehicles as well as provides various IT services for the government.

Contact
4101 Washington Avenue
Newport News, VA, 23607
T +1 757 380-2000
Sector Industrials
Industry Aerospace & Defense
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 42,000