The massive $32.4B in new awards (including Block VI Virginia-class and Build II Columbia-class submarine contracts, and a $2.2B surveillance contract) provides exceptional long-term revenue visibility. Watch for continued shipbuilding execution and margin expansion as the company targets its 15% throughput improvement goal. The cumulative FY26-FY27 free cash flow target of $1.2B-$1.3B is a new disclosure that signals management confidence in cash generation.
Price Chart
Executive Summary
HII reported record Q3 2026 revenue of $3.537B (+10.8% YoY) and diluted EPS of $5.48 (+48.9% YoY), both significantly above consensus estimates of $3.37B and $4.43. The company raised its FY26 shipbuilding revenue guidance to $10.5B-$10.7B (from $10.2B-$10.4B) and secured $32.4B in new contract awards during the quarter, providing approximately 90% shipbuilding revenue visibility through 2030. Free cash flow swung strongly positive to $429M from $16M in the prior year quarter.
Key Financial Metrics
Key Facts
- Record Q3 2026 revenue of $3.537B, up 10.8% YoY from $3.192B
- Diluted EPS of $5.48, up 48.9% YoY from $3.68
- Operating income of $246M (7.0% margin) vs $161M (5.0% margin) in Q3 2025
- Segment operating income of $262M (7.4% margin) vs $179M (5.6% margin) in Q3 2025
- New contract awards of $32.4B in Q3, year-to-date total of $43.1B
- FY26 shipbuilding revenue guidance raised to $10.5B-$10.7B from $10.2B-$10.4B
- FY26 shipbuilding operating margin guidance reaffirmed at 6.0%-6.5%
- Mission Technologies segment operating margin guidance raised to approximately 6% from 5%
- Free cash flow of $429M in Q3 vs $16M in Q3 2025
- Cumulative FY26-FY27 free cash flow target of $1.2B-$1.3B introduced
Financial Impact
Revenue beat consensus by approximately $167M (4.9%), EPS beat consensus by approximately $1.05 (23.7%). Shipbuilding revenue guidance raised by $300M at midpoint. Free cash flow improved by $413M YoY in the quarter.
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 segment operating income declined 9.2% YoY due to lower performance in surface combatants
- Mission Technologies revenue growth was only 0.6% YoY, though profitability improved significantly
- Year-to-date free cash flow remains negative at -$182M, though Q3 showed strong improvement
- Dependence on U.S. government appropriations and potential budget disruptions
- Labor challenges and supply chain risks in shipbuilding programs
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 6 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 8-K Filing (Primary) | 0001501585-26-000054 |
| Document: hii-20261029.htm | 0001501585-26-000054 |
| Document: 0001501585-26-000054-index-headers.html | 0001501585-26-000054 |
| Document: 0001501585-26-000054-index.html | 0001501585-26-000054 |
| Document: 0001501585-26-000054.txt | 0001501585-26-000054 |
| 8-K Data (Synthetic) | 0001501585-26-000054 |
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 30, 2026 today | Press Release | $317.49 | awaiting T+1 | awaiting T+1 | $315.79 (−0.54%) |
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 | $315.79 (+8.77%) |
Oct 26, 2026 3d ago | Press Release | $281.32 $279.26 | ▼ −0.73% | ▼ −1.08% | $315.79 (+12.25%) |
Oct 23, 2026 6d ago | 3 | $281.05 $281.32 | ▲ +0.10% | ▼ −0.46% | $315.79 (+12.36%) |
Oct 20, 2026 9d ago | 8-K | $273.95 $278.86 | ▲ +1.79% | ▲ +2.97% | $315.79 (+15.27%) |
Oct 19, 2026 11d ago | Press Release | $269.64 $272.23 | ▲ +0.96% | ▲ +0.63% | $315.79 (+17.12%) |
Oct 16, 2026 14d ago | GOVT-CONTRACT | $269.64 $272.23 | ▲ +0.96% | ▲ +0.63% | $315.79 (+17.12%) |
Oct 13, 2026 16d ago | Press Release | $264.53 $267.22 | ▲ +1.02% | ▲ +0.73% | $315.79 (+19.38%) |
Oct 13, 2026 17d ago | GOVT-CONTRACT | $264.53 $267.22 | ▲ +1.02% | ▲ +0.73% | $315.79 (+19.38%) |
US Market Status
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