HII Lifts Shipbuilding Outlook After Record Third-Quarter Sales

The Tip Desk · October 31, 2026 · 3 min read

Third-quarter sales reached a record $3.5 billion as the company raised its 2026 shipbuilding revenue range to $10.5 billion to $10.7 billion.

Huntington Ingalls Industries (HII), the nation’s largest shipbuilder, reported record third-quarter sales of $3.5 billion, up 10.8% from a year earlier, and raised its full-year shipbuilding revenue outlook to a range of $10.5 billion to $10.7 billion.

The company said the sales increase was driven by growth at Newport News Shipbuilding and Ingalls Shipbuilding. Operating income was $246 million and operating margin was 7.0%, compared with $161 million and 5.0% in the third quarter of 2025. Segment operating income was $262 million, or a 7.4% segment operating margin.

Net earnings were $217 million, or $5.48 a share, versus $145 million, or $3.68 a share, a year earlier.

Newport News Shipbuilding was the larger of the two shipyards. Revenue there was $1.9 billion, up 18.1% from $1.6 billion a year earlier, which the company attributed primarily to higher volumes in submarines and aircraft carriers. Segment operating income was $132 million and segment operating margin was 6.9%, compared with $80 million and 4.9%. The company said the increase in operating income was driven primarily by contract adjustments and incentives in the Virginia-class submarine program and higher submarine and aircraft carrier volumes.

Ingalls Shipbuilding revenue was $876 million, up 5.8% from $828 million, primarily from higher volumes in amphibious assault ships. Segment operating income fell to $59 million from $65 million, and segment operating margin was 6.7%, compared with 7.9%. The company said the decrease was primarily driven by lower performance in surface combatants.

Mission Technologies revenue was $792 million, up 0.6% from $787 million, which the company attributed primarily to higher volumes in Unmanned Systems, partially offset by lower volumes in Global Security. Segment operating income was $71 million and segment operating margin was 9.0%, compared with $34 million and 4.3%. The company said the increase was primarily due to a successful milestone achievement, higher volumes in Unmanned Systems, and higher equity income from nuclear and environmental joint ventures. Mission Technologies EBITDA margin was 11.9%.

New contract awards in the third quarter totaled $32.4 billion. Year-to-date awards were $43.1 billion. President and CEO Chris Kastner said the awards received during the quarter have now secured approximately 90 percent of expected shipbuilding revenue through 2030.

Cash generation improved in the quarter. Net cash provided by operating activities was $520 million and free cash flow was $429 million, compared with $118 million and $16 million in the third quarter of 2025.

The company reaffirmed its FY26 shipbuilding operating margin guidance of 6.0% to 6.5% and its previously issued free cash flow outlook of $500 million to $600 million. It also raised Mission Technologies segment operating margin guidance to approximately 6% from about 5%, and Mission Technologies EBITDA margin to approximately 9% from 8.4% to 8.6%. Full-year Mission Technologies revenue remains expected between $3.0 billion and $3.2 billion. Cumulative FY26 and FY27 free cash flow remains targeted at $1.2 billion to $1.3 billion.

Kastner said the company’s focus is squarely on shipbuilding execution. At Mission Technologies, he said the company won awards for the Medium Unmanned Surface Vessel and the Lionfish Small Unmanned Undersea Vehicle.