HII, the largest military shipbuilding company in the United States and a primary contractor for the U.S. Navy's nuclear-powered aircraft carriers and submarines, reported results for the second quarter of fiscal 2026 and raised its full-year shipbuilding outlook.

Highlights

• Second-quarter revenues were $3.4 billion
• Second-quarter net earnings were $208 million, or $5.27 diluted earnings per share
• The company raised the FY26 shipbuilding revenue guidance range to between $10.2 billion and $10.4 billion[^1]
• The company raised the low end of the FY26 shipbuilding operating margin[^2] guidance range[^1]
• The company reaffirmed its previously issued free cash flow[^2] outlook[^1]

Second-quarter 2026 revenues of $3.4 billion were up 10.9% from the second quarter of 2025, driven by growth at Newport News Shipbuilding and Ingalls Shipbuilding.

Operating income in the second quarter of 2026 was $210 million, with an operating margin of 6.1%, compared with $163 million and 5.3%, respectively, in the second quarter of 2025.

Segment operating income[^2] in the second quarter of 2026 was $224 million, and segment operating margin[^2] was 6.6%, compared with $172 million and 5.6%, respectively, in the second quarter of 2025.

Net earnings in the second quarter of 2026 were $208 million, compared with $152 million in the second quarter of 2025. Diluted earnings per share in the quarter were $5.27, compared with $3.86 in the second quarter of 2025.

Net cash used in operating activities in the quarter was $31 million, and free cash flow[^2] was negative $150 million, compared with net cash provided by operating activities of $823 million and free cash flow[^2] of $730 million in the second quarter of 2025.

New contract awards in the second quarter of 2026 totaled $6.7 billion, bringing total backlog to $57.3 billion as of June 30, 2026 — a figure representing multiple years of shipbuilding work given the company's annual shipbuilding revenue run rate in the $9–10 billion range.

“We continued to make good progress on our 2026 operational initiatives, with plans in place to achieve our shipbuilding throughput improvement goal of 15%. Given the significant shipbuilding demand and our proven ability to drive higher throughput, we are pleased to increase our top line expectations for the full year while lifting the lower end of our margin expectations as we remain focused on execution,” said Chris Kastner, HII’s president and CEO.

The throughput improvement target comes as the U.S. defense industrial base faces pressure to expand production capacity for both surface combatants and submarines, driven by Navy fleet requirements and international demand including the AUKUS submarine partnership.

[^1]: The financial outlook, expectations, and other forward-looking statements provided by the company for 2026 and beyond reflect the company’s judgment based on information available at the time of this release. Please see the “Forward-looking Statements” section in this release and HII’s Form 10-Q for factors that may impact the company’s ability to meet expectations.

[^2]: Non-GAAP measures. See Exhibit B for definitions and reconciliations.

Ingalls Shipbuilding

Ingalls Shipbuilding revenues for the second quarter of 2026 were $845 million, an increase of $121 million, or 16.7%, from the same period in 2025, primarily driven by higher volumes in amphibious assault ships.

Ingalls Shipbuilding segment operating income for the second quarter of 2026 was $58 million, up $4 million from the same period in 2025. Segment operating margin in the second quarter of 2026 was 6.9%, compared with 7.5% in the same period last year. The increase in operating income was primarily driven by higher volumes in amphibious assault ships, partially offset by favorable contract adjustments in surface combatants in the second quarter of 2025.

Key Ingalls Shipbuilding milestones for the quarter included:

• Awarded the Frigate class (FF(X)) lead yard support services contract to procure long lead time material, execute design work and begin pre-construction activities for the first ship
• Began fabrication of guided missile destroyer John F. Lehman (DDG 137), the seventh Flight III destroyer to be constructed at Ingalls

Newport News Shipbuilding

Newport News Shipbuilding revenues for the second quarter of 2026 were $1.8 billion, an increase of $246 million, or 15.3%, from the same period in 2025. The increase was primarily driven by higher volumes in aircraft carriers and submarines.

Newport News Shipbuilding, the sole builder of U.S. nuclear-powered aircraft carriers and a partner with General Dynamics Electric Boat on the Virginia- and Columbia-class submarine programs, has been ramping production to meet growing Navy demand.

Newport News Shipbuilding segment operating income for the second quarter of 2026 was $111 million, an increase of $29 million from the same period in 2025. Segment operating margin in the second quarter of 2026 was 6.0%, compared with 5.1% in the same period last year. The increase in segment operating income was primarily driven by contract adjustments and incentives in aircraft carriers and the higher volumes described above, partially offset by lower performance in aircraft carriers.

Key Newport News Shipbuilding milestones for the quarter included:

• Redelivered Virginia-class submarine USS New Jersey (SSN 796) following completion of post-shakedown availability, a maintenance period that typically follows delivery of new ships and includes combat systems and electronics upgrades, as well as general maintenance on the submarine
• Celebrated the opening of the Carrier Refueling Overhaul Workcenter, a new facility that enhances the work environment for sailors and shipbuilders during refueling and complex overhaul of nuclear-powered aircraft carriers

Mission Technologies

Mission Technologies revenues for the second quarter of 2026 were $760 million, down $31 million, or 3.9%, from the same period in 2025. The decrease was primarily due to lower volumes in All-Domain Operations, largely related to the impact of a favorable non-recurring settlement in the second quarter of 2025, as well as lower volumes in Global Security, partially offset by higher volumes in Warfare Systems and Unmanned Systems.

Mission Technologies segment operating income for the second quarter of 2026 was $55 million, up $19 million from the same period in 2025. Segment operating margin in the second quarter of 2026 was 7.2%, compared with 4.6% in the same period last year. The increase in segment operating income was primarily due to higher equity income from nuclear and environmental joint ventures.

Mission Technologies results included approximately $17 million of amortization of purchased intangible assets in the second quarter of 2026, compared with approximately $23 million in the same period last year.

Mission Technologies EBITDA margin[^2] in the second quarter of 2026 was 10.1%, compared with 8.1% in the second quarter of 2025.

Key Mission Technologies milestones for the quarter included:

• The U.S. Navy selected HII’s ROMULUS Unmanned Surface Vessel to advance to the evaluation phase of the Medium Unmanned Surface Vessel program
  • HII announced plans for the production of four additional ROMULUS 151 vessels in addition to the vessel currently under construction
• Delivered the first REMUS 130 unmanned underwater vehicle to the U.S. Department of War

HII Financial Outlook[^1]

• FY26 shipbuilding revenue between $10.2 billion and $10.4 billion; shipbuilding operating margin[^2] expected between 6.0% and 6.5%
• FY26 Mission Technologies revenue between $3.0 billion and $3.2 billion
• FY26 Mission Technologies segment operating margin of approximately 5%; Mission Technologies EBITDA margin[^2] between 8.4% and 8.6%
• FY26 free cash flow[^2] between $500 million and $600 million

Source: HII tweet