Huntington Ingalls Industries Faces Challenges Ahead of Q4 Earnings
Huntington Ingalls Industries, Inc. (HII) boasts a market capitalization of $7.7 billion and is a key player in designing and building military ships in the United States. Based in Newport News, Virginia, the company specializes in constructing non-nuclear vessels, including amphibious assault ships, expeditionary warfare ships, and cutters for the U.S. Navy and U.S. Coast Guard. The company’s fiscal Q4 earnings results are set to be revealed on Thursday, February 6.
Profit Expectations Take a Hit
As anticipation builds for the earnings report, analysts predict HII will post earnings of $3.24 per share, representing a significant 53% decrease from $6.90 per share reported during the same period last year. The company’s performance has been inconsistent over recent quarters, managing to exceed Wall Street’s earnings expectations in three out of the last four periods, while experiencing a miss before. Notably, HII’s adjusted earnings per share of $2.56 in the prior quarter fell 33.3% short of analysts’ estimates, raising concerns.
Future Earnings Projection
Looking ahead to fiscal 2024, analysts forecast an earnings per share of $14.05 for HII, marking a 17.7% decline from $17.07 in fiscal 2023. However, there’s a glimmer of hope as projections for fiscal 2025 indicate a year-over-year growth of 7.2% to an expected EPS of $15.06.
Stock Performance Overview
Over the past year, HII’s shares have dropped 22.5%, lagging behind the S&P 500 Index, which saw a 22.1% increase, and the Industrial Select Sector SPDR Fund (XLI), which rose by 19.9%. On October 31, the stock suffered a steep 26.2% decline after the release of disappointing Q3 results, which reported revenues of $2.8 billion alongside earnings of $2.56 per share. A 2.4% decrease in revenue year-over-year and a staggering 30.8% drop in earnings per share have left investors unsettled, compounded by lower sales and a marked decline in operational income from its Ingalls and Newport News segments.
Analysts’ Sentiment and Price Target
Current sentiment among Wall Street analysts is cautious, with an overall “Hold” rating for HII’s stock. Among 10 analysts covering the company, one recommends a “Strong Buy,” seven advise a “Hold,” one suggests a “Moderate Sell,” and one indicates a “Strong Sell.” This stance shows a slight decrease in bullishness compared to three months ago, when two analysts rated it a “Strong Buy.” The average price target stands at $224.36, suggesting a modest potential upside of 13.6% from current prices.
On the date of publication,
Neharika Jain
did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy
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