Q3 2023 Earnings Summary
Reported on Jan 4, 2025 (Before Market Open)
Pre-Earnings Price$220.99Last close (Nov 1, 2023)
Post-Earnings Price$228.86Open (Nov 2, 2023)
Price Change
$7.87(+3.56%)
- The award of new DDG-51 contracts solidifies Ingalls' base for the next few years, creating a stable business and contributing to an inflection point in shipbuilding growth.
- Mission Technologies is experiencing record revenue growth, winning significant contracts, and has a robust opportunity pipeline, driving strong future growth for HII.
- The company expects incremental improvement in shipbuilding margins as they stabilize labor and transition to more profitable programs like Block V Virginia-class submarines, providing upside potential.
- Delay in CVN-80 Delivery: The company announced a delay of approximately 12 months in the delivery of CVN-80 Enterprise due to major component delays from the supply chain, driven primarily by COVID and subsequent labor and supply chain effects. Although they have been holding that risk in their financials with no immediate financial impact, this delay could impact future schedules and costs.
- Uncertainty in Shipbuilding Margin Improvement: When asked about the outlook for shipbuilding margins in 2024, the CEO refrained from providing specifics, stating it's "a bit premature" but expects incremental improvement. The lack of detailed guidance may suggest potential challenges in achieving significant margin growth.
- Labor Retention Challenges and New Hire Efficiency: The company acknowledges needing to improve retention rates and is focused on addressing this challenge. Additionally, new hires take 3 to 5 years to reach optimal efficiency, which could impact productivity and margins in the near term.