MCLEAN, Va. - Huntington Ingalls Industries (NYSE: NYSE:HII) has been awarded a task order exceeding $30 million to support the U.S. Air Force's presidential and executive aircraft fleet, the company reported today. The contract will be managed by the Air Force Life Cycle Management Center's Presidential and Executive Airpower Directorate, focusing on recapitalizing and sustaining the special-purpose aircraft used for VIP transport.
HII's Mission Technologies division, specifically the Cyber, Electronic Warfare and Space (CEWS) business unit based in Dayton, Ohio, will analyze and enhance critical systems to improve the reliability and supportability of the Air Force One and E-4B aircraft, along with the sustainment of the current C-12, C-32, C-37, and C-40 aircraft fleet.
Grant Hagen, president of HII's CEWS business unit, expressed the company's commitment to supporting the Air Force's mission, highlighting the importance of ensuring the reliability of these VIP transport vehicles throughout their lifecycle. The team at HII will work in collaboration with the Presidential and Executive Airpower Directorate to inform equipment improvements and sustain presidential and executive airpower.
The task order was awarded under the Department of Defense Information Analysis Center Multiple Award Contract (IAC MAC), which facilitates the development of new knowledge for the Defense Technical Information Center repository and the broader research and development community.
Eric Wright, vice president of CEWS operations at HII, acknowledged the Air Force's confidence in HII's two decades of work in the sector and expressed eagerness to continue building on the established relationship.
The majority of the work for this task order will be conducted out of the program office at Wright-Patterson Air Force Base in Ohio. This contract represents a continuation of HII's efforts to deliver defense solutions across various domains, including shipbuilding, unmanned systems, cyber, intelligence, surveillance, reconnaissance (ISR), artificial intelligence/machine learning (AI/ML), and synthetic training.
This news is based on a press release statement from HII.
In other recent news, Huntington Ingalls Industries (HII) revealed impressive financial results, with its second-quarter revenue for 2024 reaching a record $3 billion, marking a 6.8% increase over the previous year. The company's diluted earnings per share also rose to $4.38, up from $3.27 in the same quarter of 2023. Notably, new contract awards for the quarter amounted to $3.1 billion, contributing to a robust backlog of contracts worth $48.5 billion.
In addition, HII secured a significant $209 million contract for the support of the U.S. Air Force's fighter and bomber weapons systems. The five-year task order will focus on the development and sustainment of these critical defense systems, with work to be performed at several Air Force bases. This contract is part of the Department of Defense Information Analysis Center multiple award contracts.
Analysts have noted HII's solid performance, particularly in its Mission Technologies division, which recorded a 19% increase in sales, totaling $765 million in revenue. Looking forward, HII expects shipbuilding revenue to be around $2.2 billion for Q3, with a margin of 7.8%. The company maintains a free cash flow outlook of $600 million to $700 million for 2024, with strong cash collections anticipated in Q4. These are among the recent developments for HII.
InvestingPro Insights
As Huntington Ingalls Industries (NYSE: HII) secures a significant task order to support the U.S. Air Force's VIP aircraft fleet, the company's financial metrics and analyst insights suggest a stable investment profile. With a market capitalization of $10.48 billion and a Price-to-Earnings (P/E) ratio of 14.18, HII is trading at a valuation that appears attractive when considering its near-term earnings growth. The P/E ratio has slightly adjusted to 16.65 over the last twelve months as of Q2 2024, indicating a potential for investors to consider entering at a reasonable valuation.
According to InvestingPro Tips, HII has demonstrated a commitment to shareholder returns, having raised its dividend for 12 consecutive years. The dividend yield stands at 1.95% as of the latest data, with a growth of 4.84% over the last twelve months. This consistent dividend history, combined with a low PEG ratio of 0.31, suggests that the stock could be a compelling choice for income-focused investors.
Revenue growth also remains solid, with an 8.04% increase over the last twelve months as of Q2 2024, reinforcing the company's financial health amid new contracts like the recent Air Force task order. However, it's important to note that five analysts have revised their earnings downwards for the upcoming period, which could signal caution for potential investors. For those seeking more in-depth analysis, there are additional InvestingPro Tips available at https://www.investing.com/pro/HII, offering further guidance on the company's financial outlook.
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