Home Navy shipbuilding budget Huntington Ingalls (HII) wins $ 113.6 million contract for LHA 9 vessel

Huntington Ingalls (HII) wins $ 113.6 million contract for LHA 9 vessel

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Huntington Ingalls Industries, Inc.The HII business unit of, Ingalls Shipbuilding, recently landed a modification contract to allow a long lead time for materiel and lead-time procurement activities for the LHA 9 vessel. The US Navy contract reflects its sustained commitment to the ship.

Agreement details

Worth $ 113.6 million, the modification contract brings the total advance funding for LHA 9 to $ 651 million for Huntington Ingalls. It should be mentioned that the LHA Huntington Ingalls are an integral part of the Navy’s Amphibious Assault Ship Groups and the Marine Corps Air Ground Task Forces.

Huntington Ingalls’ position in shipbuilding

The Huntington Ingalls business unit enjoys a dominant position in the global shipbuilding market through its expertise in the design and manufacture of non-nuclear vessels, which are mainly amphibious assault ships, warships expeditionary, surface fighters and docked ships, for the US Navy and US Coast Guard.

Huntington Ingalls is currently the sole builder of large-deck amphibious assault ships and expeditionary warships for the United States Navy, including LHAs and LPDs. It is imperative to mention that Huntington Ingalls could continue to land contracts with the Pentagon, for warships, thus bolstering its revenue in the shipbuilding segment.

The United States, which is the world’s largest exporter of military weapons, is focused on strengthening its military resources. This is clear from the allocation of a plan to invest $ 715 billion in the defense budget of the United States for the fiscal year 2022. Indeed, in July, the Biden administration released a document that highlighted the inclusion of an amphibious fleet of 48 to 63 amphibious ships, including eight to nine LHA / LHD type ships, 16 to 19 LPD type ships and 24 to 35 LOIS. Thus, we anticipate a solid stream of new contracts and modifications from the Pentagon involving warships. The last chord is proof of that.

Global growth prospects

Looking ahead, the global shipbuilding market is expected to experience a CAGR of 4% to $ 167 billion by 2026, according to a report from Mordor Intelligence. This, in turn, is likely to provide a good platform for a shipbuilding builder like Huntington Ingalls to win more contracts in the future.

These growth prospects will benefit Huntington Ingalls as well as other shipbuilders like General dynamics DG, Mitsubishi Heavy Industries MHVYF and BAE systems BAÉSY.

General Dynamics’ NASSCO unit has been designing, building and repairing ships since 1960. In November, General Dynamics NASSCO launched the upcoming USNS Harvey Milk (T-AO 206) – the second vessel in the John Lewis-class tanker program of the United States. ‘US Navy.

General Dynamic made a surprise profit of 3.37% in the last published quarter. It has beaten Zacks’ consensus estimate for earnings in three of the past four quarters and missed once, with the average surprise being 3.15%. Zacks’ consensus estimate for General Dynamic has been revised up 0.4% in the past 60 days to $ 11.53 per share. General Dynamic shares have appreciated 30.9% over the past year.

Mitsubishi Heavy Industries specializes in the construction of warships and maritime systems. The company provides after-sales service for destroyers and submarines, symbols of maritime operations.

Mitsubishi Heavy Industries posted a negative surprise profit of 104.65% in the last published quarter. Zacks’ consensus estimate for the company has risen 2.6% to $ 2.74 in the past 60 days. Shares of Mitsubishi Heavy Industries have returned 30.9% in the past year.

Bae Systems designs and manufactures ships and submarines, as well as their advanced combat systems and equipment. In September 2021, BAE Systems was awarded a five-year systems engineering and integration services contract valued at up to $ 478 million to continue supporting the Systems Programs Office. US Navy Strategic Strategy (SSP).

The estimated long-term profit growth rate of the company is set at 4.8%. Bae Systems shares have returned 7.5% in the past year.

Price movement

In one year, shares of Huntington Ingalls have gained 11.9% against an industry decline of 28.7%.

Image source: Zacks Investment Research

Zack Rank

Huntington Ingalls currently wears a Zacks Rank # 3 (Hold).

You can see The full list of today’s Zacks # 1 Rank (Strong Buy) stocks here.

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