MCLEAN, Va. - Huntington Ingalls Industries (NYSE: NYSE:HII), a major defense contractor with a market capitalization of $7.47 billion, has been awarded a substantial $6.7 billion contract to provide the U.S. Air Force with electronic warfare engineering and technical support. This contract represents the largest deal to date for HII's Mission Technologies division. According to InvestingPro data, the company currently trades at an attractive P/E ratio of 10.9, suggesting potential value for investors interested in defense sector opportunities.
Under the terms of the indefinite delivery/indefinite quantity contract, HII will offer a range of services to support the Air Force's electronic warfare capabilities, a critical component in modern military operations. This involves the development and maintenance of technologies that use the electromagnetic spectrum to sense, protect, and communicate.
Andy Green, executive vice president of HII and president of HII’s Mission Technologies division, emphasized the importance of staying ahead in the constantly evolving landscape of warfare. According to Green, HII’s team of experts is dedicated to ensuring the U.S. maintains a competitive edge over adversaries.
The announcement of the contract follows HII's third-quarter earnings call on October 31, 2024, where the initial news of the award was shared. With trailing twelve-month revenue of $11.71 billion, this new contract underscores HII's role as a significant player in the defense sector, with a workforce of 44,000 and a history extending over 135 years in advancing U.S. national security. InvestingPro analysis reveals 10+ additional key insights about HII's financial health and growth prospects, available exclusively to subscribers.
HII, headquartered in Virginia, is known for its comprehensive range of defense solutions, including military shipbuilding – where it stands as the nation's largest provider. The company's offerings span from ships to advanced technologies in unmanned systems, cyber, intelligence, surveillance, reconnaissance (ISR), artificial intelligence (AI), machine learning (ML), and synthetic training. Trading near its 52-week low and showing a dividend yield of 2.8%, InvestingPro's Fair Value analysis indicates HII may be undervalued, presenting a potential opportunity for value investors.
The awarding of this contract to HII highlights the continued investment by the U.S. government in electronic warfare and the importance placed on technological superiority in defense. This information is based on a press release statement from HII.
In other recent news, Huntington Ingalls Industries (HII) has been making significant strides despite facing several challenges. The company recently agreed to acquire the assets of W International, a South Carolina-based company specializing in complex metal fabrication for shipbuilding. This acquisition, which includes a manufacturing facility in Goose Creek, South Carolina, is expected to enhance HII's production capacity for modules and structures for U.S. Navy nuclear-powered submarines and aircraft carriers.
HII also completed a public offering of $1 billion in senior notes under an indenture agreement with U.S. Bank Trust Company. This move is part of the company's efforts to secure its financial position and support its ongoing operations. In addition to these financial developments, HII's Newport News Shipbuilding division completed post-shakedown availability work on the USS Montana submarine, marking another milestone in the company's service to the U.S. Navy.
However, the company reported a decrease in third-quarter earnings for 2024, with earnings per share dropping to $2.56 from $3.70 in the previous year and a 2.4% year-on-year decline in revenue to $2.7 billion. Despite these setbacks, HII secured a substantial $9.6 billion contract for amphibious warships, increasing its backlog to $49.4 billion. Analyst firms BofA Securities and TD Cowen adjusted their outlook on the company, citing ongoing shipbuilding execution challenges.
In leadership transitions, Kari Wilkinson is set to assume the role of president of the company's Newport News Shipbuilding division from January 1, 2025. The company also secured a $197 million contract to enhance U.S. Army combat vehicles through its Mission Technologies division. These recent developments reflect HII's ongoing efforts to navigate through challenges and secure its position in the defense industry.
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