The raised shipbuilding revenue guidance and record $32.4B in new awards provide multi-year revenue visibility, supporting the stock. Monitor Q4 execution on shipbuilding margins and the Mission Technologies segment's ability to sustain margin improvement.
Price Chart
Executive Summary
HII reported Q3 2026 revenue of $3.537B, up 10.8% YoY and above the $3.37B consensus, and diluted EPS of $5.48, beating the $4.43 consensus by 23.7%. The company raised its FY26 shipbuilding revenue guidance to $10.5B-$10.7B from $10.2B-$10.4B, while reaffirming shipbuilding operating margin and free cash flow outlook. Record new contract awards of $32.4B in the quarter provide visibility on ~90% of expected shipbuilding revenue through 2030.
Key Financial Metrics
Key Facts
- Q3 2026 revenue $3.537B, up 10.8% YoY, above consensus $3.37B
- Diluted EPS $5.48, up 48.9% YoY, above consensus $4.43 (beat of 23.7%)
- Operating income $246M, up 52.8% YoY; operating margin 7.0% vs 5.0%
- Segment operating income $262M, up 46.4% YoY; segment margin 7.4% vs 5.6%
- Net cash from operations $520M, up from $118M; free cash flow $429M, up from $16M
- New contract awards $32.4B in Q3, year-to-date $43.1B
- Raised FY26 shipbuilding revenue guidance to $10.5B-$10.7B from $10.2B-$10.4B
- Reaffirmed FY26 shipbuilding operating margin 6.0%-6.5% and free cash flow $500M-$600M
- Newport News Shipbuilding revenue up 18.1% YoY; Ingalls up 5.8%; Mission Technologies up 0.6%
- Dividend declared $1.38 per share, up from $1.35
Financial Impact
Revenue beat consensus by ~$167M (4.9%), EPS beat by $1.05 (23.7%). Raised shipbuilding revenue guidance by $300M at midpoint. Free cash flow of $429M vs $16M YoY.
Segment Breakdown
| Segment | Revenue | Growth |
|---|---|---|
| Ingalls Shipbuilding | $876.0M | +5.8% |
| Newport News Shipbuilding | $1.9B | +18.1% |
| Mission Technologies | $792.0M | +0.6% |
Risk Factors
- Ingalls Shipbuilding operating margin declined to 6.7% from 7.9% due to lower performance in surface combatants
- Mission Technologies revenue growth was only 0.6% YoY, though margins improved sharply
- Free cash flow year-to-date is negative $182M vs positive $284M in prior year, though Q3 alone was strong
- Dependence on U.S. government appropriations and potential budget disruptions
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 1 press release from GlobeNewswire.
| Document | Accession Number |
|---|---|
| PRESS-RELEASE Data (Synthetic) | press-3391102 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 30, 2026 today | Press Release | $317.49 | awaiting T+1 | awaiting T+1 | $315.65 (−0.58%) |
Oct 29, 2026 1d ago | 8-K | No price | awaiting T+1 | awaiting T+1 | No price |
Oct 29, 2026 1d ago | Press Release | $290.33 | awaiting T+1 | awaiting T+1 | $315.65 (+8.72%) |
Oct 26, 2026 3d ago | Press Release | $281.32 $279.26 | ▼ −0.73% | ▼ −1.08% | $315.65 (+12.20%) |
Oct 23, 2026 6d ago | 3 | $281.05 $281.32 | ▲ +0.10% | ▼ −0.46% | $315.65 (+12.31%) |
Oct 20, 2026 9d ago | 8-K | $273.95 $278.86 | ▲ +1.79% | ▲ +2.97% | $315.65 (+15.22%) |
Oct 19, 2026 11d ago | Press Release | $269.64 $272.23 | ▲ +0.96% | ▲ +0.63% | $315.65 (+17.06%) |
Oct 16, 2026 14d ago | GOVT-CONTRACT | $269.64 $272.23 | ▲ +0.96% | ▲ +0.63% | $315.65 (+17.06%) |
Oct 13, 2026 16d ago | Press Release | $264.53 $267.22 | ▲ +1.02% | ▲ +0.73% | $315.65 (+19.32%) |
Oct 13, 2026 17d ago | GOVT-CONTRACT | $264.53 $267.22 | ▲ +1.02% | ▲ +0.73% | $315.65 (+19.32%) |
US Market Status
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