HII Delivers 2025 Results

Huntington Ingalls said on Thursday that it had expected free cash flow for the current quarter to be negative, despite beating quarterly profit estimates, sending its shares down 11% at midday.

CEO Chris Kastner said on a post-earnings call that the negative cash flow represented use of about $600 million, "as some of the fourth-quarter working capital benefit unwinds".

Rising global tensions are driving up demand for Huntington Ingalls' nuclear-powered Columbia-class submarines, and the company is also positioned to benefit from U.S. President Donald Trump's push to expand the country's shipbuilding to counter China.

Trump in December unveiled plans for a new, more powerful "Trump class" of battleships as part of a broader naval buildup, a move that also increases scrutiny on defense contractors over delays and cost overruns.

Huntington also expects 2026 shipbuilding revenue between $9.7 billion and $9.9 billion, and sees shipbuilding operating margin between 5.5% and 6.5%. Analysts said that the stock would lag on Huntington's soft operating forecast.

"The bar was higher for HII after a strong run in the stock, and while this 2026 guidance may ultimately prove conservative, our first reaction is that these results and outlook will not clear that higher bar today," J.P. Morgan analyst Seth Seifman said.

The company reported a fourth-quarter profit of $4.04 per share, compared with $3.15 a year ago. Analysts on average had expected $3.88 per share, according to data compiled by LSEG.

The company said it expects full-year free cash flow between $500 million and $600 million.

Total revenue for the quarter ended December 31 rose 15.7% to $3.48 billion from a year ago, above the average analyst estimate of $3.1 billion.

• Shipbuilding Throughput 

A central theme of HII’s 2025 performance was throughput growth, particularly at its two shipyards. The company reported approximately 14% shipbuilding throughput growth in 2025 and is targeting another ~15% increase in 2026, a key metric as the U.S. Navy seeks to accelerate fleet recapitalization.

HII invested more than $400 million in capital improvements during the year, aimed at modernizing facilities, expanding manufacturing capacity, and improving workflow efficiency across its yards.

“We made solid progress on our operational initiatives in 2025 and enter 2026 with strong momentum,” said HII President and CEO Chris Kastner, noting that more than 40 ships are currently in active construction or modernization at HII’s shipyards.

• Ingalls Shipbuilding 

At Ingalls Shipbuilding, revenues rose 11.2% to $3.1 billion in 2025, driven by higher volumes in surface combatants and amphibious assault ships. Segment operating income increased to $233 million, with margins holding steady at 7.6%.

Key milestones during the year included the delivery of guided missile destroyer Ted Stevens (DDG 128), the launch and christening of Jeremiah Denton (DDG 129), and progress on the San Antonio-class amphibious transport dock program. Ingalls also signed a memorandum of agreement with HD Hyundai Heavy Industries to explore ways to accelerate ship production—highlighting ongoing efforts to address capacity constraints.

• Newport News Shipbuilding 

Newport News Shipbuilding posted 2025 revenue of $6.5 billion, up 9.0%, driven primarily by submarine and aircraft carrier construction. Segment operating income jumped 34.6% to $331 million, with margins improving to 5.1%.

Major milestones included the delivery of Virginia-class submarine Massachusetts (SSN 798), the launch of Arkansas (SSN 800), keel laying of Barb (SSN 804), and the award of a contract modification for two additional Block V Virginia-class submarines. Newport News also installed its first additively manufactured valve manifold assembly on a new aircraft carrier, marking a tangible step toward advanced manufacturing integration.

• Mission Technologies  

HII’s Mission Technologies segment delivered $3.0 billion in 2025 revenue, up 3.6%, with operating income increasing nearly 32% to $153 million. Growth was led by unmanned systems, warfare systems, and global security programs.

Highlights included delivery of Lionfish small uncrewed undersea vehicles to the U.S. Navy, production of the 750th REMUS UUV, and successful deployment of the Yellow Moray UUV from a Virginia-class submarine—reinforcing HII’s role in unmanned maritime systems.

(Reuters + Staff)