Ingalls Shipbuilding 2014 file photo
Huntington Ingalls Industries' Pascagoula shipyard (File)
Huntington Ingalls Industries Inc., which owns shipyards in Pascagoula, Gulfport and Avondale, La., today reported $100 million in second-quarter profits, up 75 percent from $57 million in the same period of 2013.
The defense giant's healthy quarter was boosted in part due to operating margin improvement and cash generation at the Ingalls segment, President and CEO Mike Petters told investors during an earnings conference call this morning.
The Newport News, Va.-based company also reported revenues of $1.72 billion during the quarter, up 2 percent from the year prior.
Earnings per share were $2.04 compared to $1.12 a share a year earlier, beating analysts' estimates by 23 cents.
Companywide, total backlog is now $24 billion, $14 billion of which is funded, Petters said.
Of that, $7 billion was awarded in the second quarter, he said.
Operating margin at the Ingalls Shipbuilding segment, which includes the Pascagoula and Avondale, La., yards and a composite yard in Gulfport, rose to 10.3 percent, up from 5.2 percent in the same period of the year before.
At the Newport News division, the company's operating margin fell very slightly to 9.2 percent.
HII's goal of a 9-plus margin in 2015 "remains intact," Petters said.
"We had a great quarter, and we're having a good year," he said, but there's still a lot of work to do to get operating income to the 9 to 10 percent range by next year.
Ingalls revenues for the second quarter decreased $20 million, or 3.4 percent, from the same period in 2013, driven by lower sales in amphibious assault ships, partially offset by higher sales in the Coast Guard's national security cutter program and surface combatants.
The sail-away of LHA 6 America in July, Petters said, marks a milestone on the last of Ingalls' under-performing contracts.
The company continues its shutdown of the Gulfport facility, he said, and continues its study of Avondale to see if that yard can be redeveloped. If it cannot, HII will move forward with its plan to close Avondale also.
Newport News revenues for the second quarter increased $37 million, or 3.4 percent, and was primarily driven by higher revenues in submarines and energy and the acquisition of The S.M. Stoller Corp., which was completed in January.
In late May, HII acquired UniversalPegasus International Holdings. HII reported the post-acquisition results of UPI as part of its newly created "other" segment.
Revenues of this segment were $20 million, and operating income was less than $1
million for the quarter, primarily due to the acquisition of UPI.
"With the acquisition of UniversalPegasus, HII is leveraging its engineering and program management core competencies in the energy market, while remaining focused on our Navy program execution to reach 9-plus percent margins in 2015," Petters said.