HII Reports Second Quarter 2025 Results
NEWPORT NEWS, Va., July 31, 2025 (GLOBE NEWSWIRE) -- HII (NYSE:HII) today reported results for the second quarter of fiscal 2025.
Highlights
Second quarter revenues were $3.1 billion
Second quarter net earnings were $152 million or $3.86 diluted earnings per share
New contract awards of $11.9 billion, resulting in record backlog of $56.9 billion
Entered into a strategic partnership with C3 AI to expand our use of digital technologies and apply artificial intelligence to accelerate shipbuilding throughput
Reaffirming FY25 segment revenue and operating margin guidance1
Second Quarter ResultsSecond quarter 2025 revenues of $3.1 billion were up 3.5% from the second quarter of 2024, driven by growth at Newport News Shipbuilding, Mission Technologies and Ingalls Shipbuilding.
Operating income in the second quarter of 2025 was $163 million and operating margin was 5.3%, compared to $189 million and 6.3%, respectively, in the second quarter of 2024.
Segment operating income2 in the second quarter of 2025 was $172 million and segment operating margin2 was 5.6%, compared to $203 million and 6.8%, respectively, in the second quarter of 2024. The decreases were driven primarily by less favorable segment results at Newport News Shipbuilding compared to the prior year period.
Net earnings in the quarter were $152 million, compared to $173 million in the second quarter of 2024. Diluted earnings per share in the quarter was $3.86, compared to $4.38 in the second quarter of 2024.
Net cash provided by operating activities in the quarter was $823 million and free cash flow2 was $730 million, compared to net cash used in operating activities of $9 million and free cash flow1 of negative $99 million in the second quarter of 2024.
New contract awards in the second quarter of 2025 were $11.9 billion, bringing total backlog to a record $56.9 billion as of June 30, 2025.
"Second quarter results were largely in line with our expectations as we continue to make steady progress on our operational initiatives for 2025. We have seen early signs that targeted investments are helping to stabilize the workforce and supply chain, in support of the broader maritime industrial base," said Chris Kastner, HII's president and CEO.
1The financial outlook, expectations and other forward looking statements provided by the company for 2025 and beyond reflect the company's judgment based on information available at the time of this release. Please see the "Forward-looking Statements" section in this release and our Form 10-Q for factors that may impact the company's ability to meet expectations.2Non-GAAP measures. See Exhibit B for definitions and reconciliations.
Results of Operations
Three Months Ended
Six Months Ended
June 30
June 30
($ in millions, except per share amounts)
2025
2024
$ Change
% Change
2025
2024
$ Change
% Change
Sales and service revenues
$
3,082
$
2,977
$
105
3.5%
$
5,816
$
5,782
$
34
0.6%
Operating income
163
189
(26
)
(13.8)%
324
343
(19
)
(5.5)%
Operating margin %
5.3
%
6.3
%
(106) bps
5.6
%
5.9
%
(36) bps
Segment operating income1
172
203
(31
)
(15.3)%
343
373
(30
)
(8.0)%
Segment operating margin %1
5.6
%
6.8
%
(124) bps
5.9
%
6.5
%
(55) bps
Net earnings
152
173
(21
)
(12.1)%
301
326
(25
)
(7.7)%
Diluted earnings per share
$
3.86
$
4.38
$
(0.52
)
(11.9)%
$
7.66
$
8.25
$
(0.59
)
(7.2)%
1 Non-GAAP measures that exclude non-segment factors affecting operating income. See Exhibit B for definitions and reconciliations.
Segment Operating Results
Ingalls Shipbuilding
Three Months Ended
Six Months Ended
June 30
June 30
($ in millions)
2025
2024
$ Change
% Change
2025
2024
$ Change
% Change
Revenues
$
724
$
712
$
12
1.7%
$
1,361
$
1,367
$
(6
)
(0.4)%
Segment operating income
54
56
(2
)
(3.6)%
100
116
(16
)
(13.8)%
Segment operating margin %
7.5
%
7.9
%
(41) bps
7.3
%
8.5
%
(114) bps
Ingalls Shipbuilding revenues for the second quarter of 2025 were $724 million, an increase of $12 million, or 1.7%, from the same period in 2024, primarily driven by higher volumes in surface combatants, partially offset by lower volumes in amphibious assault ships.
Ingalls Shipbuilding segment operating income for the second quarter of 2025 was $54 million, a decrease of $2 million from the same period in 2024. Segment operating margin in the second quarter of 2025 was 7.5%, compared to 7.9% in the same period last year. The decreases were primarily driven by lower performance and lower contract incentives on amphibious assault ships, partially offset by contract adjustments in surface combatants. Prior year amphibious assault ship results benefited from a delivery contract incentive for USS Richard M. McCool Jr. (LPD 29).
Key Ingalls Shipbuilding milestones for the quarter:
Christened guided missile destroyer Jeremiah Denton (DDG 129)
Signed MOU with HD Hyundai Heavy Industries to explore opportunities to collaborate on accelerating ship production
Newport News Shipbuilding
Three Months Ended
Six Months Ended
June 30
June 30
($ in millions)
2025
2024
$ Change
% Change
2025
2024
$ Change
% Change
Revenues
$
1,603
$
1,535
$
68
4.4
%
$
2,999
$
2,969
$
30
1.0
%
Segment operating income
82
111
(29
)
(26.1)%
167
193
(26
)
(13.5)%
Segment operating margin %
5.1
%
7.2
%
(212) bps
5.6
%
6.5
%
(93) bps
Newport News Shipbuilding revenues for the second quarter of 2025 were $1.6 billion, an increase of $68 million, or 4.4%, from the same period in 2024. The increase was primarily driven by higher volumes in the Columbia-class submarine program and the Virginia-class submarine program, partially offset by unfavorable cumulative adjustments on aircraft carrier construction, and favorable contract adjustments and incentives in the second quarter of 2024 on the aircraft carrier Refueling and Complex Overhaul (RCOH) program.
Newport News Shipbuilding segment operating income for the second quarter of 2025 was $82 million, a decrease of $29 million from the same period in 2024. Segment operating margin in the second quarter of 2025 was 5.1% compared to 7.2% in the same period last year. The decreases were primarily driven by lower performance in the Virginia-class submarine program and aircraft carrier construction, partially offset by contract incentives on the Virginia-class submarine program and aircraft carrier construction, as well as higher risk retirement on the Columbia-class submarine program. Additionally, prior year results benefited from favorable contractadjustments and incentives on the aircraft carrier RCOH program.
Key Newport News Shipbuilding milestones for the quarter:
Awarded contract modification for construction of two additional Block V Virginia-class submarines
Launched Virginia-class submarine Arkansas (SSN 800)
Celebrated first meal aboard Virginia-class submarine Massachusetts (SSN 798)
Mission Technologies
Three Months Ended
Six Months Ended
June 30
June 30
($ in millions)
2025
2024
$ Change
% Change
2025
2024
$ Change
% Change
Revenues
$
791
$
765
$
26
3.4
%
$
1,526
$
1,515
$
11
0.7
%
Segment operating income
36
36
—
—
%
76
64
12
18.8
%
Segment operating margin %
4.6
%
4.7
%
(15) bps
5.0
%
4.2
%
76 bps
Mission Technologies revenues for the second quarter of 2025 were $791 million, an increase of $26 million, or 3.4%, from the same period in 2024. The increases were primarily due to higher volumes in C5ISR and live, virtual, and constructive training solutions.
Mission Technologies segment operating income for the second quarter of 2025 was $36 million, consistent with results in the second quarter of 2024. Segment operating margin in the second quarter of 2025 was 4.6%, compared to 4.7% in the same period last year as changes in contract mix offset the higher volumes noted above.
Mission Technologies results included approximately $23 million of amortization of purchased intangible assets in the second quarter of 2025, compared to approximately $25 million in the same period last year.
Mission Technologies EBITDA margin1 in the second quarter of 2025 was 8.1%, compared to 8.5% in the second quarter of 2024.
Key Mission Technologies milestones for the quarter:
Received multiple award contract to provide live training solutions to the U.S. Army's Program Executive Office for Simulation, Training and Instrumentation
Delivered initial Lionfish small uncrewed undersea vehicles (SUUVs) to the U.S. Navy under multi-year program
Announced the order of more than a dozen REMUS 300 SUUVs by Hitachi
Achieved a successful forward-deployed launch and recovery of the Yellow Moray uncrewed undersea vehicle (UUV), a variant of the REMUS 600, from the HII-built USS Delaware (SSN 791), a Virginia-class submarine
1Non-GAAP measures. See Exhibit B for definitions and reconciliations.
HII Financial Outlook1
Reaffirming FY25 segment revenue and operating margin guidance
FY25 shipbuilding revenue between $8.9 and $9.1 billion; expect shipbuilding operating margin2 between 5.5% and 6.5%
FY25 Mission Technologies revenue between $2.9 to $3.1 billion, Mission Technologies segment operating margin between 4.0% and 4.5%; and Mission Technologies EBITDA margin2 between 8.0% and 8.5%
Increasing FY25 free cash flow2 guidance to between $500 and $600 million
FY25 Outlook1
Shipbuilding Revenue
$8.9B - $9.1B
Shipbuilding Operating Margin2
5.5% - 6.5%
Mission Technologies Revenue
$2.9B - $3.1B
Mission Technologies Segment Operating Margin
4.0% - 4.5%
Mission Technologies EBITDA Margin2
8.0% - 8.5%
Operating FAS/CAS Adjustment
($40M)
Non-current State Income Tax Expense3
($15M)
Interest Expense
($110M)
Non-operating Retirement Benefit
$191M
Effective Tax Rate
~21%
Depreciation & Amortization
~$340M
Capital Expenditures
~4% of Sales
Free Cash Flow2
$500M - $600M
1The financial outlook, expectations and other forward-looking statements provided by the company for 2025 and beyond reflect the company's judgment based on the information available at the time of this release. Please see the "Forward-looking Statements" section in this release and our Form 10-Q for factors that may impact the company's ability to meet expectations.
2Non-GAAP measures. See Exhibit B for definitions. In reliance upon Item 10(e)(1)(i)(B) of Regulation S-K, reconciliations of forward–looking GAAP and non–GAAP measures are not provided because of the unreasonable effort associated with providing such reconciliations due to the variability in the occurrence and the amounts of certain components of GAAP and non-GAAP measures. For the same reasons, we are unable to address the significance of the unavailable information, which could be material to future results.
3 Outlook is based on current tax law. Variability exists based on how and when individual states conform to recent federal tax law changes.
About HII
HII is a global, all-domain defense provider. HII's mission is to deliver the world's most powerful ships and all-domain solutions in service of the nation, creating the advantage for our customers to protect peace and freedom around the world.
As the nation's largest military shipbuilder, and with a more than 135-year history of advancing U.S. national security, HII delivers critical capabilities extending from ships to unmanned systems, cyber, ISR, AI/ML and synthetic training. Headquartered in Virginia, HII's workforce is 44,000 strong. For more information, please visit www.HII.com.
Conference Call Information
HII will webcast its earnings conference call at 9 a.m. Eastern time today. A live audio broadcast of the conference call and supplemental presentation will be available on the investor relations page of the company's website: www.HII.com. A telephone replay of the conference call will be available from noon today through Thursday, August 7th by calling (866) 813-9403 or (929) 458-6194 and using access code 808356.
Cautionary Statement Regarding Forward-Looking Statements and Projections
Statements in this earnings release and in our other filings with the SEC, as well as other statements we may make from time to time, other than statements of historical fact, constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "may," "will," "should," "expects," "intends," "plans," "anticipates," "believes," "estimates," "guidance," "outlook," "predicts," "potential," "continue," and similar words or phrases or the negative of these words or phrases. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by these forward-looking statements. Although we believe the expectations reflected in the forward-looking statements are reasonable when made, we cannot guarantee future results, levels of activity, performance, or achievements. There are a number of important factors that could cause our actual results to differ materially from the results anticipated by our forward-looking statements, which include, but are not limited to: our dependence on the U.S. Government for substantially all of our business; significant delays or reductions in appropriations for our programs and/or changes in customer priorities and requirements (including government budgetary constraints, shifts in defense spending, and changes in customer short-range and long-range plans);our ability to estimate our future contract costs, including cost increases due to inflation, labor challenges, changes in trade policy, or other factors and our efforts to recover or offset such costs and/or changes in estimated contract costs, and perform our contracts effectively; changes in business practices, procurement processes and government regulations and our ability to comply with such requirements; adverse economic conditions in the United States and globally; our level of indebtedness and ability to service our indebtedness; our ability to deliver our products and services at an affordable life cycle cost and compete within our markets; our ability to attract, retain, and train a qualified workforce; subcontractor and supplier performance and the availability and pricing of raw materials and components; our ability to execute our strategic plan, including with respect to share repurchases, dividends, capital expenditures, and strategic acquisitions; investigations, claims, disputes, enforcement actions, litigation (including criminal, civil, and administrative), and/or other legal proceedings, and improper conduct of employees, agents, subcontractors, suppliers, business partners, or joint ventures in which we participate, including the impact on our reputation or ability to do business; changes in key estimates and assumptions regarding our pension and retiree health care costs; security threats, including cyber security threats, and related disruptions; natural and environmental disasters and political instability; health epidemics, pandemics and similar outbreaks; and other risk factors discussed herein and in our other filings with the SEC. There may be other risks and uncertainties that we are unable to predict at this time or that we currently do not expect to have a material adverse effect on our business, and we undertake no obligation to update or revise any forward-looking statements. You should not place undue reliance on any forward-looking statements that we may make.
This release also contains non-GAAP financial measures and includes a GAAP reconciliation of these financial measures. Non-GAAP financial measures should not be construed as ...
