Huntington Ingalls Reports Record $3.2B Q3 Sales, 18% Shipbuilding Growth Amid Backlog

Huntington Ingalls Industries (HII) reported record third quarter 2025 sales of $3.2 billion, marking a 16-18% year-over-year increase driven by strong shipbuilding and Mission Technologies divisions. The company achieved a backlog of $56 billion, with $33 billion funded, reflecting robust demand despite some uncertainty around the timing of new contract awards such as Virginia Class Block 6 and Columbia submarine builds; management noted these negotiations are not impacted by the government shutdown. Earnings per share rose significantly to $3.68 from $2.56 the previous year, surpassing analyst expectations, supported by volume growth and operational improvements including a 15% throughput increase and cost reduction efforts. However, HII faces challenges including a higher-than-expected effective tax rate due to reduced R&D tax credits, a negative net adjustment at Newport News, and potential performance variability from contract transitions. While shipbuilding operations remain stable during budget lapses, Mission Technologies programs are more susceptible to budget timing, prompting close monitoring by management. Overall, HII's financial performance shows strong growth and strategic progress amid some operational and contract uncertainties.