NEWPORT NEWS, Va., May 03, 2018 (GLOBE NEWSWIRE) -- Huntington Ingalls Industries (NYSE:HII) reported first quarter 2018 revenues of $1.87 billion, up 8.7 percent from the first quarter of 2017. The increase was driven primarily by higher volume at HII’s Newport News and Ingalls shipbuilding divisions.

Operating income in the quarter was $191 million and operating margin was 10.2 percent, compared to $168 million and 9.7 percent, respectively, in the first quarter of 2017. The increases in operating income and operating margin were mainly the result of a higher Operating FAS/CAS Adjustment compared to the prior year.

Diluted earnings per share in the quarter was $3.48, compared to $2.56 in the same period of 2017. The increase was predominantly due to higher operating income and the non-operating portion of retirement benefit expense.

First quarter cash from operations was $120 million and free cash flow¹ was $47 million, compared to $98 million and $40 million, respectively, in the first quarter of 2017.

New contract awards in the quarter were approximately $2.6 billion, primarily driven by an award for the detail design and construction of the amphibious transport dock LPD 29, bringing total backlog to approximately $22 billion as of March 31.

“The first quarter was highlighted by revenue growth in all three business segments,” said Mike Petters, HII’s president and CEO. “With the Navy’s commitment to achieve its goal of 355 ships and Congress providing the necessary funding, HII stands ready to support construction of a larger fleet.”

Ingalls Shipbuilding revenues for the first quarter were $585 million, an increase of $35 million, or 6.4 percent, from the same period in 2017, due to increased revenues in amphibious assault ships, partially offset by decreased revenues in the Legend-class National Security Cutter (NSC) program. Higher amphibious assault ship revenues were the result of increased volumes on LPD 29 (unnamed), Fort Lauderdale (LPD 28) and Bougainville (LHA 8), partially offset by decreased volume on the delivered USS Portland (LPD 27). Lower NSC program revenues were primarily the result of decreased volume on Kimball (NSC 7), partially offset by increased volume on Stone (NSC 9) in the quarter.

Ingalls Shipbuilding segment operating income for the first quarter was $64 million, a decrease of $2 million from the same period last year. Segment operating margin in the quarter was 10.9 percent, compared to 12.0 percent in the same period last year. These decreases were primarily due to lower risk retirement on the NSC program, partially offset by higher risk retirement on the San Antonio-class (LPD 17) program.

Newport News Shipbuilding revenues for the first quarter were $1.1 billion, an increase of $111 million, or 11.4 percent, from the same period in 2017, mainly due to higher revenues in aircraft carriers and naval nuclear support services. Higher aircraft carrier revenues were primarily the result of increased volumes on the execution contract for the refueling and complex overhaul (RCOH) of USS George Washington (CVN 73), the construction contract for John F. Kennedy (CVN 79) and the advance planning contract for Enterprise (CVN 80), partially offset by decreased volumes on the execution contract for the RCOH of the redelivered USS Abraham Lincoln (CVN 72), the construction contract for the delivered USS Gerald R. Ford (CVN 78) and the inactivation of the decommissioned aircraft carrier USS Enterprise (CVN 65). The increase in naval nuclear support services revenues was primarily the result of higher volumes in submarine support and facility maintenance services, partially offset by lower aircraft carrier support volume.

Newport News Shipbuilding segment operating income for the first quarter was $51 million, a decrease of $21 million from the same period last year. Segment operating margin was 4.7 percent for the quarter, compared to 7.4 percent in the same period last year. These decreases were primarily due to one-time bonus payments in 2018 related to recently enacted federal tax reform, as well as year-to-year variances in contract mix.

Technical Solutions revenues for the first quarter were $233 million, an increase of $8 million, or 3.6 percent, from the same period in 2017, primarily due to higher revenues in oil and gas and fleet support services, partially offset by lower nuclear and environmental and integrated mission solutions revenues.

Technical Solutions segment operating income for the first quarter was $2 million, compared to an operating loss of $18 million in the first quarter of 2017. The increase was primarily a result of the establishment of an allowance for accounts receivable on a nuclear and environmental commercial contract in 2017, partially offset by one-time bonus payments in 2018 related to recently enacted federal tax reform.

Key Technical Solutions milestones for the quarter:

• Received a notice to proceed from the Department of Energy to transition the Los Alamos Legacy Cleanup Contract to N3B, a joint venture led by SN3, part of HII’s Technical Solutions division, with partner BWXT Technical Services Group, Inc.
• Australia’s Department of Defence awarded a contract to Naval Shipbuilding Institute (NSI), a joint venture between HII’s Technical Solutions division and Kellogg Brown and Root’s (KBR) Government Services division, to establish and manage Australia’s new Naval Shipbuilding College.

About Huntington Ingalls Industries

Huntington Ingalls Industries is America’s largest military shipbuilding company and a provider of professional services to partners in government and industry. For more than a century, HII’s Newport News and Ingalls shipbuilding divisions in Virginia and Mississippi have built more ships in more ship classes than any other U.S. naval shipbuilder. HII’s Technical Solutions division provides a wide range of professional services through its Fleet Support, Integrated Missions Solutions, Nuclear and Environmental, and Oil and Gas operations. Headquartered in Newport News, Virginia, HII employs nearly 39,000 people operating both domestically and internationally. For more information, please visit www.huntingtoningalls.com.