Huntington Ingalls: 38% EPS Beat, CEO Sells $4.25M
Huntington Ingalls Industries reported Q2 diluted EPS of $5.27, a 38% beat vs. the $3.82 consensus, and raised full-year shipbuilding revenue guidance to $10.2B-$10.4B. The operational case is support
HII Raises Guidance After 38% EPS Beat, CEO Cashes Out
NEW YORK, August 25 —
Huntington Ingalls Industries, Inc. (HII) delivered a Q2 EPS print 38% above consensus, yet the executive with the clearest view of the company's cash trajectory sold $4.25 million in stock eleven days after reporting. Trailing twelve-month free cash flow sits at negative $300 million against a $500M, $600M full-year target that management simultaneously reaffirmed.
- Q2 diluted EPS of $5.27 vs. $3.82 consensus; full-year shipbuilding revenue guidance raised to $10.2B, $10.4B from $9.7B, $9.9B.
- $6.7 billion in Q2 contract awards; total backlog $54 billion, anchored by $76.6 billion in submarine contract modifications.
- CEO Kastner sold 13,070 shares at $324.92 on August 10; no insider made an open-market purchase in 90 days.
The Shipyards Are Actually Delivering
Huntington Ingalls (HII) builds the U.S. Navy's most capital-intensive assets: nuclear-powered carriers and submarines at Newport News Shipbuilding, amphibious assault ships at Ingalls Shipbuilding, and battlefield software through Mission Technologies. Q2 shipbuilding revenue of $2.7 billion came in 15.7% above the prior year, with Newport News at $1.8 billion and Ingalls at $845 million, marking HII's fourth consecutive double-digit quarter. Mission Technologies revenue slipped 3.9% on a non-recurring contract but held above a 10% EBITDA margin. The guidance raise to $10.2B, $10.4B revenue and 6%, 6.5% margins reflects that throughput; Q3 shipbuilding margin below 6% would be the first sign the raise was premature.
Backlog Is Not Cash
The $54 billion backlog and $76.6 billion in submarine contract modifications ($25 billion for Newport News' VCS Block VI and $5.5 billion for the Columbia class) provide revenue visibility most defense primes would envy. But visibility and cash are different assets. HII ended Q2 with $12 million in cash against $2.94 billion in debt and total liquidity, including credit facilities, of $1.7 billion. Trailing twelve-month FCF is negative $300 million; reaching the $500M, $600M full-year target requires H2 to generate roughly $800M, $900M, a swing management attributes to receipt timing and worth stress-testing against the current price with a DCF model.
| Ticker | Mkt cap | Fwd P/E | 52-wk |
|---|---|---|---|
| HII | $11.5B | 14.0x | +8.4% |
| LHX | $49.0B | 19.5x | -5.3% |
| LDOS | $17.0B | 10.6x | -24.1% |
| NOC | $77.3B | 17.9x | -7.4% |
| TDG | $66.6B | 24.6x | -15.2% |
| GD | $101.8B | 20.3x | +19.1% |
What Kastner's August Sale Implies
CEO Christopher Kastner sold 13,070 shares at $324.92 on August 10, eleven days after Q2 earnings; director Victoria Harker sold 723 shares three days earlier. Trailing 90-day insider activity totals $4.49 million in sales against zero open-market purchases; nobody inside the company is putting capital behind the upside case. That does not prove the guidance wrong, but the FCF gap must close in H2, and Q3 results are the first hard checkpoint where the receipt-timing explanation gets validated or it doesn't. The operational case is real; the cash-conversion risk equally so. Run the free Huntington Ingalls Industries, Inc. deep-dive →
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Frequently Asked Questions
What were Huntington Ingalls Q2 earnings results?
Huntington Ingalls Industries reported Q2 diluted EPS of $5.27 against a consensus of $3.82, a 38% beat. Shipbuilding revenue of $2.7 billion came in 15.7% above the prior year, with Newport News contributing $1.8 billion and Ingalls $845 million. The company also raised full-year shipbuilding revenue guidance to $10.2B-$10.4B from $9.7B-$9.9B.
Why did Huntington Ingalls CEO sell shares?
CEO Christopher Kastner sold 13,070 shares at $324.92 on August 10, eleven days after Q2 earnings were reported. Director Victoria Harker sold 723 shares three days earlier. Total trailing 90-day insider activity amounts to $4.49 million in sales against zero open-market purchases; no insider has put capital behind the upside case.
What is Huntington Ingalls backlog and revenue visibility?
HII ended Q2 with a total backlog of $54 billion, anchored by $76.6 billion in submarine contract modifications. Those modifications include $25 billion for Newport News' VCS Block VI and $5.5 billion for the Columbia class. The backlog provides long-term revenue visibility, though the article notes that visibility and cash are different assets.
What is HII free cash flow vs. full-year guidance?
Trailing twelve-month free cash flow is negative $300 million, against a full-year target of $500M-$600M that management simultaneously reaffirmed alongside the guidance raise. Reaching that target requires H2 to generate roughly $800M-$900M, a swing management attributes to receipt timing. HII ended Q2 with $12 million in cash against $2.94 billion in debt.
What did Huntington Ingalls raise its guidance to?
HII raised full-year shipbuilding revenue guidance to $10.2B-$10.4B from $9.7B-$9.9B, with margins of 6%-6.5%. Q2 contract awards totaled $6.7 billion. A Q3 shipbuilding margin below 6% would be the first signal that the guidance raise was premature.
Huntington Ingalls Industries reported Q2 2026 diluted EPS of $5.27, beating Wall Street's consensus estimate by 38% and marking the fourth consecutive quarter of double-digit shipbuilding growth — then its CEO sold $4.25 million in stock eleven days later. The company simultaneously guides $500 million to $600 million in free cash flow for the full year while trailing free cash flow stands at negative $300 million.