Huntington Ingalls Industries, Inc. has recently released its latest 10-Q report. The company designs, builds, overhauls, and repairs military ships in the United States through three segments: Ingalls, Newport News, and Mission Technologies. Its work includes non-nuclear ships for the U.S. Navy and Coast Guard, nuclear-powered aircraft carriers and submarines, carrier refueling and overhaul services, and a range of defense technology services such as C5ISR, cyber, autonomous systems, and nuclear operations support.
In Item 2, management said the company continues to operate in an environment marked by geopolitical tension, policy shifts, inflation, trade uncertainty, and a difficult labor market. HII said it does most of its business with the U.S. Government, primarily the Department of War, and that its backlog and production activity remain tied to long-term defense programs. The company said no material changes were made to its critical accounting policies as of June 30, 2026, including revenue recognition, retirement-related benefit plans, and workers’ compensation.
The fiscal year 2027 budget request, submitted April 3, 2026, called for $65.8 billion in shipbuilding procurement funding, including $60.2 billion in discretionary funding and $5.6 billion in mandatory funding. The request covers one Columbia-class submarine, two Virginia-class submarines, one Arleigh Burke-class destroyer, one San Antonio-class amphibious transport dock, one America-class amphibious assault ship, and the first Frigate-class ship, while also continuing funding for Gerald R. Ford-class aircraft carriers and carrier refueling programs.
For the second quarter, sales and service revenues rose to $3.418 billion from $3.082 billion a year earlier, an increase of $336 million, or 11%. For the first six months, revenues increased to $6.517 billion from $5.816 billion, up $701 million, or 12%. HII said the gains were driven primarily by higher volumes at Newport News and Ingalls.
Operating income increased to $210 million in the quarter from $163 million, up $47 million, or 29%. For the first half, operating income rose to $365 million from $324 million, up $41 million, or 13%. Segment operating income increased to $224 million from $172 million in the quarter and to $396 million from $343 million in the first six months.
Cost of product sales and service revenues climbed to $2.987 billion from $2.687 billion in the quarter, and to $5.678 billion from $5.027 billion in the first half. General and administrative expenses were $242 million in the quarter, essentially flat with $241 million a year earlier, and rose to $500 million from $487 million for the six-month period.
Net earnings were $208 million for the quarter, compared with $152 million a year earlier, and $357 million for the first six months, compared with $301 million. Interest expense was $27 million in the quarter versus $28 million a year earlier, while federal and foreign income taxes increased to $46 million from $36 million. The company also reported non-operating retirement benefit income of $53 million in the quarter and $106 million for the first half. The market has reacted to these announcements by moving the company's shares 8.13% to a price of $303.21. Check out the company's full 10-Q submission here.
