Company | Huntington Ingalls Industries, Inc. |
Ticker | HII (NYSE) |
Reporting Period | Q2 2026 (quarter ended June 30, 2026) |
Earnings Date | July 30, 2026 — 9:00 AM ET |
Prepared | July 29, 2026 |
Sector ETF Benchmark | ITA (iShares U.S. Aerospace & Defense ETF) |
Key Takeaway: The setup into Q2 2026 is mixed-to-cautious — consensus has drifted lower since the Q1 print and the bar is now modest, but the stock has underperformed ITA by ~20 points since May 5, meaning any guidance raise or contract-award confirmation (Block VI / Columbia) could be a meaningful catalyst; the single biggest swing factor is whether management can confirm both submarine contracts closed in Q2 as promised.
Heading into HII's Q2 2026 print, the setup is one of a low-but-not-trivial bar against a stock that has already de-rated sharply. Consensus Q2 operating EPS stands at ~$3.32 — down from ~$3.44 at the time of the Q1 print — while revenue consensus of ~$3.16B implies roughly 2.5% year-over-year growth, a meaningful deceleration from the 18% shipbuilding revenue growth posted in Q1. Management guided Q2 shipbuilding revenue of ~$2.4B and operating margins of 5.7%–6.0%, with Mission Technologies revenue of ~$750M at ~4% margin, and free cash flow in the range of -$100M to +$100M. The critical wildcard is the Virginia-class Block VI and Columbia Build II contract awards: CEO Kastner said at the Bernstein conference (May 28) he "fully expects" both done before end of Q2, and GD confirmed on its July 29 call that "contracts will be coming soon" — if HII confirms awards on the call, it removes the single largest overhang on the stock and unlocks meaningful free cash flow in H2. The stock has fallen ~14% since the Q1 print vs. ITA up ~10%, pricing in execution risk and the contract delay; a clean quarter with contract confirmation could close much of that gap, while another slip would likely pressure shares further.
Key Takeaway: Consensus is a low bar on revenue (guided range implies modest growth) but margins remain the swing factor — shipbuilding operating margin at 5.7–6.0% guidance vs. 5.73% actual in Q1 leaves little room for error, and any LHA-8 or CVN-80 adjustment could push the print below the midpoint.
KPI | Q1 2026 Actual | Q2 2025 Actual (Prior Year) | Q2 2026 Consensus Estimate | YoY Change | Q2 2026 Guidance (Mgmt) | Consensus vs. Guidance Midpoint |
Total Revenue ($M) | $3,099M | $3,082M | $3,158M | +2.5% YoY | ~$3,150M (implied) | +0.3% |
Shipbuilding Revenue ($M) | $2,390M | $2,327M | $2,429M | +4.4% YoY | ~$2,400M | +1.2% |
Shipbuilding Op. Margin (%) | 5.73% | 5.84% | 5.90% | -0.06 pp YoY (est.) | 5.7%–6.0% | +0.05 pp vs. midpoint |
Mission Technologies Revenue ($M) | $748M | $791M | $760M | -3.9% YoY | ~$750M | +1.3% |
Mission Technologies Op. Margin (%) | 4.68% | 4.55% | 4.26% | -0.29 pp YoY (est.) | ~4.0% | +0.26 pp vs. guidance |
EPS — Diluted Operating ($) | $3.29 | $3.33 | $3.32 | -0.3% YoY | N/A (no specific EPS guide) | N/A |
Free Cash Flow ($M) | -$461M | $730M | $72M | N/M (Q2 2025 was unusually high) | -$100M to +$100M | +$72M vs. $0 midpoint |
Backlog ($B) | $54.0B | $56.9B | $60.9B (est.) | +7.0% YoY (est.) | N/A | N/A |
Pattern: HII has beaten on shipbuilding revenue in 5 of the last 8 quarters and on operating EPS in 6 of 8, with the misses concentrated in Q3–Q4 2024 when pre-COVID contract headwinds were most acute. The recent streak of beats (Q1–Q4 2025 and Q1 2026) reflects the throughput ramp, but the magnitude of beats has narrowed as consensus has caught up to the improved trajectory.
Sources: Visible Alpha Consensus and Actuals Data.
Key Takeaway: Estimates have drifted modestly lower since the Q1 print — Q2 operating EPS consensus fell from ~$3.44 to ~$3.32 and FY26 EPS from ~$15.87 to ~$15.32 — creating a slightly easier bar, but the gap between consensus and guidance midpoints is narrow, leaving little room for a meaningful positive surprise unless contract awards or deliveries accelerate.
KPI (Period) | Estimate ~5 Days Post Q1 Earnings (as of ~May 12, 2026) | Current Consensus (July 2026) | Estimate Δ (%) | Initial Guidance (Q1 Call) | Current Guidance | Guidance Δ | Consensus vs. Guidance (%) |
Total Revenue — Q2 2026 | $3,175M | $3,158M | -0.5% | ~$3,150M (implied) | Unchanged | — | +0.3% |
Shipbuilding Revenue — Q2 2026 | $2,439M | $2,429M | -0.4% | ~$2,400M | Unchanged | — | +1.2% |
Operating EPS — Q2 2026 | $3.44 | $3.32 | -3.5% | N/A | N/A | — | N/A |
Free Cash Flow — Q2 2026 | $70M | $72M | +2.9% | -$100M to +$100M | Unchanged | — | +$72M vs. $0 midpoint |
Total Revenue — FY2026 | $13,020M | $12,985M | -0.3% | $12,700M–$13,100M | Unchanged | — | +0.7% vs. midpoint |
Operating EPS — FY2026 | $15.87 | $15.32 | -3.5% | N/A | N/A | — | N/A |
Free Cash Flow — FY2026 | $552M | $551M | -0.2% | $500M–$600M | Unchanged | — | +$1M vs. midpoint |
Key Takeaway: HII has dramatically underperformed both ITA and the S&P 500 since the Q1 print — down ~14% vs. ITA +10% and SPY +1% — driven almost entirely by multiple compression and sentiment deterioration rather than estimate cuts, as the stock de-rated from ~$326 to ~$280 while the defense sector rallied on LMT/NOC/GD beats.
Metric | HII | ITA (Sector ETF) | S&P 500 (SPY) |
Price at Q1 Earnings (May 5, 2026) | $326.13 | $215.37 (indexed 100) | $723.77 (indexed 100) |
Price as of July 28, 2026 | $299.90 | $244.98 | $740.86 |
Return Since Q1 Earnings | -8.0% | +13.7% | +2.4% |
Relative to ITA | -21.7 pp vs. ITA | — | — |
52-Week High | ~$444 (Feb 2026) | — | — |
% Off 52-Week High | ~-33% | — | — |
Key Events Since May 5, 2026:
Sources: Stock Price Data (Yahoo Finance); HII press releases; GD Q2 2026 Earnings Call Transcript.
Key Takeaway: The most important development is GD's July 29 confirmation that Virginia-class Block VI contracts are "coming soon," directly validating HII's Q2 award expectation and removing the single largest overhang on the stock; the FY27 budget request and $350B reconciliation package provide a multi-year demand tailwind that is not yet in guidance.
Key Takeaway: Peer commentary from GD, NOC, and LMT in the last 60 days is uniformly positive for HII's Q2 setup — GD's marine segment showed 10.4% revenue growth with measurable productivity gains and confirmed Block VI contracts are imminent, NOC confirmed nuclear Navy propulsion is its biggest growth driver, and LMT's record backlog and raised guidance signal a robust demand environment that directly benefits HII's programs.
Note: Only commentary about Q2 2026 (current reporting quarter) or forward-looking statements made after HII's May 5, 2026 Q1 earnings are included below. Backward-looking discussion of peers' own prior-quarter results has been excluded.
Relevance: HIGHEST — GD is HII's direct co-builder on Virginia-class and Columbia-class submarines (Electric Boat) and a surface combatant builder (Bath Iron Works). GD's marine commentary is the most direct read-through available.
Theme | GD Commentary (Q2 2026 Call) | Read-Through to HII |
Block VI Contract Timing | "We're told that these contracts will be coming soon." CEO Novakovic confirmed the customer and submarine industrial base are "aligned around the need for getting these contracts out, particularly to stabilize the industrial base." | Directly validates HII's Q2 award expectation. If confirmed on HII's call, unlocks H2 FCF and removes the #1 stock overhang. |
Marine Revenue Growth & Productivity | Marine Systems revenue grew 10.4% in Q2, driven by Columbia and Virginia class programs. Earnings improved 17.5% on a 40 bps margin improvement, with "clear and measurable productivity gains." | Strong GD marine growth and margin improvement suggests the submarine industrial base is executing well — positive for HII's Newport News throughput narrative. |
Columbia Program Hours Earned | "Hours earned are up 37% versus the same period last year" on the Columbia program at Electric Boat. "Momentum continues to build at each of our shipyards." | HII is the other Columbia builder. A 37% increase in hours earned at EB implies similar throughput acceleration is achievable/expected at Newport News. |
DDG-51 Delivery Acceleration | Bath Iron Works' most recent DDG-51 delivery was "accelerated by almost three months versus planned due to the excellent performance of the ship in its sea trial." | HII's Ingalls builds DDG-51s. Accelerated delivery at Bath suggests industry-wide improvement in destroyer execution; positive for HII's Ingalls margin trajectory. |
Submarine Build Rate Path | GD confirmed it is "on that path" to 2 Virginia-class + 1 Columbia by early 2030s and is "actually where we expect to be at this point in the process." | Confirms the industry is on track for the build rate ramp that underpins HII's 6% medium-term revenue growth guidance. |
Supply Chain | "Significant improvements in their pace and the cadence of delivery" in the submarine supply chain, though "still some challenging areas where we have single sources of supply." | Improving supply chain reduces a key execution risk for HII's Newport News programs, though single-source risks remain a watch item. |
Marine Growth Outlook | "We don't have any expectation that it will slow down much because there's just volume out there that we have to execute on." | Sustained demand environment for naval shipbuilding directly benefits HII's multi-year backlog and revenue visibility. |
Workforce | "We've been really pleased with our ability to attract and retain the necessary number of workers in our shipyards. The Navy's been a great help with that." | Positive labor read-through for HII, which has also cited improving retention at Newport News following wage adjustments. Navy support for workforce is an industry-wide tailwind. |
Relevance: HIGH — NOC is a key supplier to the nuclear Navy (propulsion systems) and a major defense contractor with direct exposure to the same budget and program environment as HII.
Theme | NOC Commentary (Q2 2026 Call) | Read-Through to HII |
Nuclear Navy Propulsion | Nuclear Navy propulsion is NOC's "biggest growth driver" in marine, with programs now in production and expected to be "a key growth driver and performance driver for the foreseeable future." Programs have "come out of development and now [are] in production." | NOC's propulsion systems go into HII-built submarines and carriers. Production ramp at NOC directly supports HII's ability to accelerate submarine delivery cadence. |
Defense Budget / FY27 | House and Senate Armed Services Committees supported $1.1T in FY27 base budget (+10% vs. FY26). $67B supplemental request and $350B reconciliation package advancing. "Core programs remain well supported in the base budget." | HII's CEO confirmed all 6% medium-term growth is in the base budget. The 10% FY27 budget increase and reconciliation package represent upside to current guidance. |
Demand Environment | "Significant opportunity and increased demand for our portfolio." Expects "continued strong bookings" and "increased momentum in government outlays." Full-year book-to-bill of at least 1.25x. "Rapidly expanding backlog provides a strong foundation for growth." | Broad-based defense demand environment is a positive read-through for HII's backlog growth and new award potential. |
Program Execution | Nuclear Navy propulsion team is "executing very well to drive schedule improvement and improve overall performance, thus margins." Added resources (people and infrastructure) to execute plans. | Improving execution at NOC on nuclear propulsion reduces a key supply chain risk for HII's carrier and submarine programs. |
Relevance: MODERATE-HIGH — LMT is a major defense contractor with exposure to the same budget environment and is a key integrator of systems deployed on HII-built ships (Aegis, Trident II, sea-based hypersonics).
Theme | LMT Commentary (Q2 2026 Call) | Read-Through to HII |
Defense Demand & Guidance Raise | Raised FY26 guidance to $79.75–$81.75B (8% YoY growth at midpoint, up from prior 5% guide). Record $230B backlog (+38% YoY). "Every segment at Lockheed Martin will grow faster in the back half of 2026." | Broad-based defense demand acceleration is a positive read-through for HII's shipbuilding programs and potential for guidance raise. |
Trident II Production Facility | Making progress on new Titusville, FL facility to "support critical development of the Trident II missile" — the submarine-launched ballistic missile for Columbia-class submarines. | Trident II is the payload for Columbia-class submarines built by HII. LMT's production ramp directly supports the Columbia program's strategic importance and funding priority. |
Sea-Based Hypersonics | Conventional Prompt Strike contract modifications totaling $1.4B for "sea-based hypersonic strike weapon system" development. | Sea-based deployment implies integration on Navy surface ships and submarines built by HII, supporting future design and integration work. |
Long-Term Contract Structures | Government embracing "commercially inspired, long-term, enforceable agreements" where contractors retain efficiency gains rather than giving them back through cost analysis. "Faster, faster, faster" is the Deputy Secretary's message. | If this contracting philosophy extends to shipbuilding, it would be transformative for HII's margin trajectory on Block VI and future contracts — a potential upside not in current guidance. |
Sustained Long-Term Demand | "Political budget cycles will not, in the long or medium term, really adversely affect what the country needs." Programs are "in high demand" regardless of budget cycle timing. | HII's nuclear carrier and submarine programs are strategic national assets with similar long-cycle demand characteristics — validates HII's 4–6 year revenue growth visibility. |
Sources: GD Q2 2026 Earnings Call Transcript (July 29, 2026); NOC Q2 2026 Earnings Call Transcript (July 21, 2026); LMT Q2 2026 Earnings Call Transcript (July 23, 2026).
Key Takeaway: Insider activity since the Q1 print is minimal — only one open-market sale was disclosed, by the Chief HR Officer, and it was a discretionary sale of a modest size; there are no open-market buys and no clustered selling patterns that would signal concern from insiders.
Name | Title | Transaction Type | Value | Date | Note |
Hughes, Edmond E. Jr. | EVP & Chief HR Officer | Open Market Sale | ~$1.1M (3,500 shares) | May 28, 2026 | Discretionary sale; no 10b5-1 plan indicated; sold ~29% of remaining holdings; occurred same day as Bernstein conference |
Key Takeaway: The call will be defined by three binary questions: (1) Were Block VI and Columbia contracts awarded in Q2? (2) Are SSN 800 and LPD 30 on track for 2026 delivery? (3) Will management raise the FY26 FCF guide? The answers to these three questions will determine whether the stock re-rates toward peers or continues to underperform.