On February 1, 2024, Huntington Ingalls Industries Inc (HII, Financial), the largest independent military shipbuilder in the United States, released its 8-K filing, detailing a strong financial performance for the fourth quarter and full year of 2023. The company, which operates three segments including the historic Ingalls and Newport News shipyards, as well as the Mission Technologies segment, reported record revenues and a significant increase in operating income.
HII's fourth-quarter revenues grew to $3.2 billion, a 13% increase from the same period in the previous year, driven by higher volumes across all segments. The full-year revenues also saw a substantial rise to $11.5 billion, marking a 7.3% year-over-year growth. The company's diluted earnings per share (EPS) for the fourth quarter was $6.90, and $17.07 for the full year, representing significant increases from the EPS of $3.07 and $14.44 in the respective periods of 2022.
The operating income for the fourth quarter was $312 million with an operating margin of 9.8%, compared to $105 million and 3.7% in the fourth quarter of 2022. The full-year operating income reached $781 million with an operating margin of 6.8%, up from $565 million and 5.3% in 2022. These improvements were primarily attributed to higher segment operating income, the sale of a court judgment, and the settlement of an insurance claim.
Net cash provided by operating activities in 2023 was $970 million, and the company generated a strong free cash flow of $692 million, compared to $766 million and $494 million, respectively, in 2022. The new contract awards for the year were approximately $12.5 billion, which contributed to a total backlog of about $48.1 billion as of December 31, 2023.
Chris Kastner, HII’s president and CEO, commented on the company's performance, stating,
2023 was a strong year for HII. We continue to invest both in our shipyards and in IRAD to both expand capacity and develop new products and solutions for our customers. Our growth rate for the year of over 7% and our free cash flow generation at almost $700M illustrate that we are entering a period of accelerated growth and increased free cash flow generation at HII,"and added,
Looking ahead, over the next 5 years we expect growth of over 4% and cash generation of $3.6B. Our expectations are grounded in the assumption we must deliver on our commitments to our customers."
For investors and stakeholders, the financial achievements of Huntington Ingalls Industries Inc (HII, Financial) are indicative of the company's strong position in the Aerospace & Defense industry. The significant growth in revenues, operating income, and free cash flow demonstrate HII's ability to effectively manage its operations and capitalize on market opportunities. The company's robust backlog also suggests a stable and promising outlook for future growth and profitability.
As HII continues to invest in its shipyards and innovative technologies, the company is well-positioned to maintain its leadership in the defense sector and deliver on its commitments to customers, which is crucial for sustaining long-term growth and shareholder value.
Explore the complete 8-K earnings release (here) from Huntington Ingalls Industries Inc for further details.
