GET DAILY SIGNALSHuntington Ingalls Industries (HII) Delivers Record Q3 with +48.9% EPS Surge
Key Takeaways
- Third-quarter 2026 revenue rose 10.8% year over year to a record $3.54 billion, topping the roughly $3.38–3.39 billion consensus estimate.
- Diluted earnings per share (EPS) surged 48.9% to $5.48, well above analyst expectations of about $4.36–4.41.
- New contract awards totaled $32.4 billion in the quarter, lifting total backlog to a record $86.2 billion.
- Segment operating margin expanded 180 basis points (bps) year over year to 7.4%.
- HII raised its full-year 2026 shipbuilding revenue guidance to $10.5–10.7 billion.
- Free cash flow rebounded sharply to $429 million, versus just $16 million a year earlier.
Why This Quarter Matters
HII, the nation’s largest military shipbuilder, sits at the heart of U.S. naval expansion. Its portfolio covers submarines, aircraft carriers, surface combatants, and unmanned systems. Quarterly results serve as a useful barometer for defense spending trends and supply-chain health. Ahead of the report, the focus was on whether the company could maintain throughput improvements and margin recovery that started in 2025, and whether recent submarine and carrier awards would begin converting into revenue. With a record order book and better shipyard productivity, this quarter tested execution on turning strong demand into steady, profitable output.
The Results in Detail
HII posted record third-quarter revenue of $3.54 billion, up 10.8% from $3.19 billion a year earlier and ahead of the consensus range near $3.38–3.39 billion. Net earnings rose 49.7% to $217 million, while diluted EPS reached $5.48 compared with $3.68 in the prior-year quarter, comfortably beating estimates around $4.36–4.41.
By segment, Newport News Shipbuilding revenue grew 18.1% to $1.91 billion, with operating margin improving to 6.9% from 4.9%. Ingalls Shipbuilding revenue increased 5.8% to $876 million. Mission Technologies revenue edged higher to $792 million, and its operating margin jumped to 9.0% from 4.3%. Consolidated operating margin widened to 7.0% from 5.0%.
Management raised its 2026 shipbuilding revenue guidance to $10.5–10.7 billion from the previous $10.2–10.4 billion range. It reaffirmed shipbuilding operating margin of 6.0–6.5% and free cash flow of $500–600 million. I also checked this using Tickeron’s AI Screener to compare HII with peers in the defense sector.
Market Reaction
Shares of HII rallied in early trading after the release, initially rising more than 17% before settling around 10% higher. The stock remained above its 50-day moving average as investors focused on the earnings beat and the large increase in contract awards. Enthusiasm centered on the scale of new bookings, particularly the Block VI Virginia-class and Build II Columbia-class submarine awards, which improved revenue visibility. Management noted that the company has now secured about 90% of its expected shipbuilding revenue through 2030.
What to Watch Next
Investors should monitor execution on the updated shipbuilding revenue guidance of $10.5–10.7 billion, which hinges on continued throughput gains, hiring, and outsourcing progress. Margin consistency at Newport News will remain important given the larger favorable contract adjustments seen this quarter.
The fourth quarter will include recognition of the $5.1 billion refueling and complex overhaul award for the USS Harry S. Truman (CVN 75). Mission Technologies’ updated margin outlook—roughly 6% operating margin and 9% EBITDA margin—will face its next test as unmanned systems orders increase.
Additional items to track include labor and supply-chain costs, free cash flow conversion toward the $500–600 million target, and the cumulative 2026–2027 free cash flow goal of $1.2–1.3 billion. Federal appropriations timing and shipyard wage investments are the main variables heading into 2027.
My Use of Tickeron Tools
I regularly rely on Tickeron’s AI Screener when reviewing defense names like HII. It helps me quickly filter peers by fundamentals, technical signals, and industry trends, which adds useful context to quarterly results and backlog data without replacing deeper fundamental work.
Disclaimer
The information on this webpage is provided for general informational and educational purposes only and is not intended as investment advice, a recommendation to purchase or sell any security, or an offer or solicitation related to investments. It does not consider your personal financial situation, goals, or risk profile, and all investing carries inherent risks, including the possibility of losing your entire investment. For more details, please review our full disclaimer.
Contributor
Sergey Savastiouk, Ph.D. has a degree in Applied Mathematics from Moscow University and has extensive experience as an entrepreneur, investor, manager, and mathematician. His professional expertise is in applied mathematics, mathematical modeling, system and pattern analysis, and software and hardware system integration. He has served as the CEO of several hi-tech start-up companies and nonprofit organizations, which has given him proven capabilities in business strategy for high-tech start-up companies, market assessment, company formation, team building, product development, marketing, and sales. He has published numerous articles in journals and magazines on related fields. As a retail investor, he spent 15 years developing his proprietary trading and quantitative algorithms (now Tickeron’s A.I.), which brought him significant returns in trading the stock market. His current work and goal in founding Tickeron is to bring professional, sophisticated stock market analysis capabilities to retail investors via an easy-to-use interface.
HII in upward trend: 10-day moving average broke above 50-day moving average on October 29, 2026
The 10-day moving average for HII crossed bullishly above the 50-day moving average on October 29, 2026. This indicates that the trend has shifted higher and could be considered a buy signal. In 7 of 11 past instances when the 10-day crossed above the 50-day, the stock continued to move higher over the following month. The odds of a continued upward trend are 64%.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Momentum Indicator moved above the 0 level on October 16, 2026. You may want to consider a long position or call options on HII as a result. In 47 of 77 past instances where the momentum indicator moved above 0, the stock continued to climb. The odds of a continued upward trend are 61%.
The Moving Average Convergence Divergence (MACD) for HII just turned positive on October 01, 2026. Looking at past instances where HII's MACD turned positive, the stock continued to rise in 26 of 41 cases over the following month. The odds of a continued upward trend are 63%.
HII moved above its 50-day moving average on October 26, 2026 date and that indicates a change from a downward trend to an upward trend.
Following a +2.64% 3-day Advance, the price is estimated to grow further. Considering data from situations where HII advanced for three days, in 205 of 336 cases, the price rose further within the following month. The odds of a continued upward trend are 61%.
Bearish Trend Analysis
The RSI Indicator demonstrated that the stock has entered the overbought zone. This may point to a price pull-back soon.
The Stochastic Oscillator demonstrated that the ticker has stayed in the overbought zone for 8 days. The longer the ticker stays in the overbought zone, the sooner a price pull-back is expected.
Following a 3-day decline, the stock is projected to fall further. Considering past instances where HII declined for three days, the price rose further in 50 of 62 cases within the following month. The odds of a continued downward trend are 60%.
HII broke above its upper Bollinger Band on October 29, 2026. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
The Aroon Indicator for HII entered a downward trend on October 22, 2026. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
Fundamental Analysis (Ratings)
The Tickeron Valuation Rating of 50 (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (2.346) is normal, around the industry mean (5.121). P/E Ratio (18.833) is within average values for comparable stocks, (17.235). Projected Growth (PEG Ratio) (0.788) is also within normal values, averaging (2.564). Dividend Yield (0.017) settles around the average of (0.060) among similar stocks. P/S Ratio (0.830) is also within normal values, averaging (18.330).
The Tickeron Profit vs. Risk Rating rating for this company is 56 (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 77, placing this stock slightly better than average.
The Tickeron Price Growth Rating for this company is 58 (best 1 - 100 worst), indicating steady price growth. HII’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is 61 (best 1 - 100 worst), indicating strong sales and a profitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron PE Growth Rating for this company is 74 (best 1 - 100 worst), pointing to worse than average earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
Notable companies
Industry description
Market Cap
High and low price notable news
Volume
Fundamental Analysis Ratings
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
Advertisement
General Information
a company which designs, builds and maintains nuclear and non-nuclear ships
Industry AerospaceDefense
Advertisement