Huntington Ingalls Reports 2Q Earnings

Thursday, August 11, 2011

Huntington Ingalls Industries, Inc. reported second quarter 2011 sales of $1.56 billion, down 2.9 percent from the same period last year, and operating margin of 5.8 percent, up from negative 1.2 percent last year. Second quarter diluted earnings per share was $0.80, up from a loss of $0.23 in 2010. Cash provided by operating activities in the second quarter of 2011 was $186 million, up $91 million, or 96 percent, over the same period last year. New business awards for the 2011 second quarter were approximately $1.0 billion, bringing total backlog to $16.8 billion as of June 30.                     

Second quarter consolidated sales decreased $47 million from the same period in 2010, driven by lower sales volume on the DDG-51 program and the CVN-65 USS Enterprise Extended Dry-docking Selected Restricted Availability (EDSRA). These decreases were partially offset by higher sales on the LHA program, the National Security Cutter program and the advanced planning contract for the CVN-72 USS Abraham Lincoln Refueling and Complex Overhaul (RCOH). Additionally, during the second quarter of 2010 the LPD program was impacted by the decision to wind down shipbuilding operations at the Avondale, La., facility in 2013, which resulted in a reduction to revenues of $115 million in 2010 to reflect revised estimates to complete LPD-23 Anchorage and LPD-25 Somerset.

Segment operating income in the quarter was $98 million, up $108 million from the year earlier period. Total operating income was $91 million, up from negative $20 million last year. Total operating margin was 5.8 percent for the quarter, compared with negative 1.2 percent in 2010. The results for the second quarter of 2010 included a $113 million pre-tax charge resulting from the decision to wind down shipbuilding operations at the facility in Avondale. Excluding the non-recurring items related to Avondale, total operating margin was 5.4 percent(2) in the second quarter of 2010.

The value of new contract awards during the three months ended June 30, 2011, was approximately $1 billion. Significant new awards during this period include the construction contract for DDG-113 and additional contract work for the CVN-71 USS Theodore Roosevelt RCOH.       

Ingalls revenues for the three months ended June 30, 2011, decreased $6 million from the same period in 2010, primarily driven by lower sales in the DDG-51 program, partially offset by higher sales in the LHA program. The decrease in the DDG-51 program was primarily due to the deliveries of DDG-107 USS Gravely in the third quarter of 2010 and DDG-110 USS William P. Lawrence in the first quarter of 2011. Additionally, during the second quarter of 2010 the LPD program was impacted by the decision to wind down shipbuilding operations at the Avondale facility in 2013, which resulted in a $115 million reduction to revenues to reflect revised estimates to complete LPD-23 and LPD-25.

Ingalls operating income for the three months ended June 30, 2011, was $19 million compared with an operating loss of $94 million in the same period in 2010. Ingalls operating margin was 2.7 percent for the quarter, compared with negative 13.2 percent for the same period last year. The three months ended June 30, 2011, included negative cumulative margin corrections of $19 million on the LPD-22 through LPD-25 contract, partially offset by performance improvements on other programs. The results for the second quarter of 2010 included a $113 million pre-tax charge resulting from the Avondale decision. Excluding the non-recurring items related to Avondale, Ingalls operating margin was 2.3 percent(3) in the second quarter of 2010, compared with 2.7 percent this quarter.

Key Ingalls program milestones for the quarter:

    * Awarded construction contract for DDG-113, the first destroyer in the restart of the DDG-51 program
    * Began fabrication of LPD-26 John P. Murtha, the latest in the San Antonio class of amphibious transport docks
    * Christened amphibious transport dock LPD-23 Anchorage
    * Conducted builder's trials for the latest National Security Cutter, WMSL-752 Stratton

Newport News revenues for the three months ended June 30, 2011, decreased $41 million, or 4.5 percent, from the same period in 2010, primarily driven by lower sales volume on the CVN-71 USS Theodore Roosevelt RCOH and CVN-78 Gerald R. Ford, partially offset by higher sales volume on the advanced planning contract for the CVN-72 USS Abraham Lincoln RCOH. The year-over-year decrease was also driven by performance improvements realized on the Virginia-class submarine program in the second quarter of 2010, which was not recurring in the same period in 2011.

Newport News operating income for the three months ended June 30, 2011, was $79 million compared with $84 million in the same period 2010. The decrease was primarily due to the lower sales volume described above and the impact of performance improvements realized on the Virginia-class submarine program in the second quarter of 2010, which were not recurring in the same period in 2011. Newport News operating margin was 9.1 percent for the quarter, relatively flat compared with 2010.

Key Newport News program milestones for the quarter:

    * Began ramp-up of Virginia-class production to two submarines per year
    * Completed dry dock work for CVN-71 USS Theodore Roosevelt RCOH
    * Conducted sea trials for SSN-781 California
    * Held keel-laying ceremony for SSN-783 Minnesota

Maritime Reporter August 2014 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Industry Professionals to Speak at ShipConstructor Conference

The speakers representing various companies at next week's SSI Americas ShipConstructor User Conference, October 7-9, 2014 in Mobile, Alabama, demonstrate SSI's

NY Harbor Supply & Distribution Fall Reception/Buffet

More than 600 attendees are expected at the 52nd annual New York Harbor Supply & Distribution Fall Reception/Buffet for the energy and energy related industries

Kounalakis Joins OW Bunker N. America

OW Bunker, a reseller and physical supplier of marine fuels, announced the appointment of Georgia Kounalakis to its physical supply operation in North America.

Finance

Norvestor to Become PG’s Largest Shareholder

Norvestor VI, L.P., a fund advised by Norvestor Equity AS, announced it has signed an agreement to invest in Ing Per Gjerdrum AS including its subsidiaries PG Hydraulics AS and PG Construction AS.

GasLog Closes First Option Vessels Dropdown

GasLog Ltd.  announced today the closing of the sale of two modern liquefied natural gas (“LNG”) carriers, the Methane Jane Elizabeth and Methane Rita Andrea,

Brent Holds Above $97, Eyes Worst Quarter Since 2012

Brent crude futures hovered above $97 a barrel on Tuesday, aided by firm U.S. and Chinese data, but the oil benchmark was on track for its deepest quarterly drop

 
 
Naval Architecture Navigation Offshore Oil Pipelines Pod Propulsion Salvage Ship Electronics Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | terms and conditions | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1526 sec (7 req/sec)