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HII
FY2026 Q2
Improving
Huntington Ingalls Industries, Inc. earnings call
Buzzberg read
Shipbuilding revenue guidance raised to $10.2-$10.4 billion
HII reported strong Q2 2026 results, with shipbuilding revenue up 16% year-over-year, beating expectations. Management raised full-year shipbuilding revenue and margin guidance, and highlighted the newly finalized submarine contracts with the Navy as a positive demand signal. Q2 2026 revenue of $3.4B, EPS of $5.27, both beat expectations
Buzzberg read Shipbuilding revenue guidance raised to $10.2-$10.4 billion HII reported strong Q2 2026 results, with shipbuilding revenue up 16% year-over-year, beating expectations. Management raised full-year shipbuilding revenue and margin guidance, and highlighted the newly finalized submarine contracts with the Navy as a positive demand signal. Q2 2026 revenue of $3.4B, EPS of $5.27, both beat expectations Read full analysisCollapse analysis
HII reported strong Q2 2026 results, with shipbuilding revenue up 16% year-over-year, beating expectations. Management raised full-year shipbuilding revenue and margin guidance, and highlighted the newly finalized submarine contracts with the Navy as a positive demand signal. Q2 2026 revenue of $3.4B, EPS of $5.27, both beat expectations
- Shipbuilding revenue grew 16% YoY, the fourth consecutive quarter of double-digit growth
- Management raised FY2026 shipbuilding revenue guidance to $10.2-10.4B and margin to 6-6.5%
- Announced finalization of VCS Block 6 and Columbia submarine contracts, valued at $76.6B total
SHIPBUILDING Revenue$2.7B+13% QoQ
Revenue$3.418B+10% QoQ
EPS$5.27+39% QoQ
Gross margin13.22%Reported
6 grounded callouts
What matters now
The highest-signal changes from the call.
Contracts
Submarine contracts finalized with $76.6 billion total
Operations
Delivering five ships over the next twelve months
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Operations
Throughput improving 12% year-over-year in 2026
Growth
Unmanned systems fastest growing business unit
Opportunities
New battleship and frigate programs are upside opportunities
Reported period
Actuals
| Metric | Reported | Change |
|---|---|---|
| SHIPBUILDING Revenue | $2.7B | +13% QoQ |
| Revenue | $3.418B | +10% QoQ |
| EPS | $5.27 | +39% QoQ |
| Gross margin | 13.22% | Reported |
| Operating margin | 6.14% | Reported |
| Free cash flow | $0.043B | Reported |
Forward-looking
Forward guidance
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Free cash flow | FY2026 | $500M–$600M | $550M | Maintained |
| Operating marginSHIPBUILDING | FY2026 | 6%–6.5% | 6.25% | Raised |
| Operating marginMISSION_TECHNOLOGIES | FY2026 | 5% | 5% | Maintained |
| RevenueSHIPBUILDING | FY2026 | $10.2B–$10.4B | $10.3B | Raised |
| RevenueMISSION_TECHNOLOGIES | FY2026 | $3B–$3.2B | $3.1B | Maintained |
AI, capex & demand read
Management read
Upbeat
Management highlighted strong operational momentum, raised guidance, and expressed confidence in future growth opportunities.
Management AI read
Management discussed AI-defined capabilities for naval platforms through a partnership with Applied Intuition, positioning the company to capitalize on growth in autonomous products and unmanned systems.
Investment and capacity
Management is investing in shipyard capacity and infrastructure, including distributed shipbuilding, new partnerships, and capital projects, with support from contract incentives and company investments.
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Partners
Partners
Chris Kastner
HII booked a portion of submarine contract incentives in Q2, before the formal award, based on agreements with the Navy, boosting current quarter margins. — This accounting treatment front-loads margin recognition, indicating Q2 margins may overstate the underlying performance of the submarine programs.
Evidence
“The Navy, the EB, and the Newport News team worked very hard to get it over the goal line, but it's very consistent with what we expect from a profitability standpoint.”
External signals
Supply-chain alpha · 3returns since call
HII is on track to increase distributed shipbuilding by 30% this year, shifting more work to external partners to boost throughput.
Evidence
“we are on track to increase distributed shipbuilding by 30% this year”
HII booked a portion of submarine contract incentives in Q2, before the formal award, based on agreements with the Navy, boosting current quarter margins.
Evidence
“we did not want to wait. We had an agreement with the Navy to get started on those incentives. So the Q2 has a piece of the incentives baked into it.”
HII expects significant free cash flow generation in Q4 to meet its annual guidance, relying on contract advances, incentives, and a tax credit.
Evidence
“We are reiterating that outlook and do expect meaningful positive cash impacts from contract advances and incentives, as well as favorable cash tax impacts in the fourth quarter.”
Methodology & coverage
Management-only analysis. All 1 validated company mentions are shown. Reported actuals and forward guidance are kept separate. Public evidence is limited to eight short attributed quotes. AI-generated analysis can be incomplete or wrong; verify important claims against the original source.