Huntington Ingalls Industries (NYSE:HII) Shares Gap Up on Better-Than-Expected Earnings

Key Points

• Huntington Ingalls Industries beat quarterly expectations: EPS came in at $5.48 versus the $4.36 consensus, while revenue reached $3.54 billion, up 10.8% year over year and above estimates.
• The stock opened sharply higher at $304.79 after closing at $279.26. Analysts maintain a “Moderate Buy” consensus rating, with an average price target of $361.75.
• HII raised its quarterly dividend to $1.41, or $5.64 annually, producing a 1.8% yield; CEO Christopher Kastner also sold 13,070 shares under a pre-arranged trading plan.

Huntington Ingalls Industries, Inc. (NYSE:HII - Get Free Report)'s stock price gapped up prior to trading on Thursday following a better than expected earnings announcement. The stock had previously closed at $279.26, but opened at $304.79. Huntington Ingalls Industries shares last traded at $301.53, with a volume of 485,011 shares traded.

The aerospace company reported $5.48 earnings per share (EPS) for the quarter, topping analysts' consensus estimates of $4.36 by $1.12. Huntington Ingalls Industries had a return on equity of 12.89% and a net margin of 5.01%. The business had revenue of $3.54 billion during the quarter, compared to the consensus estimate of $3.38 billion. During the same period last year, the company earned $3.68 earnings per share. Huntington Ingalls Industries's quarterly revenue was up 10.8% on a year-over-year basis.

Huntington Ingalls Industries Increases Dividend

The firm also recently declared a quarterly dividend, which will be paid on Friday, December 11th. Investors of record on Friday, November 27th will be given a $1.41 dividend. This represents a $5.64 annualized dividend and a yield of 1.8%. The ex-dividend date of this dividend is Friday, November 27th. This is a positive change from Huntington Ingalls Industries's previous quarterly dividend of $1.38. Huntington Ingalls Industries's payout ratio is 33.61%.

Wall Street Analysts Forecast Growth

Several equities analysts have recently weighed in on HII shares. Sanford C. Bernstein reduced their target price on shares of Huntington Ingalls Industries from $327.00 to $304.00 and set a "market perform" rating for the company in a research note on Wednesday, October 14th. Citigroup lifted their target price on shares of Huntington Ingalls Industries from $349.00 to $379.00 and gave the stock a "buy" rating in a research note on Friday, July 31st. Wolfe Research raised Huntington Ingalls Industries from a "peer perform" rating to an "outperform" rating and set a $364.00 price objective on the stock in a research report on Friday, July 31st. Wells Fargo & Company lifted their target price on shares of Huntington Ingalls Industries from $325.00 to $340.00 and gave the company an "equal weight" rating in a report on Tuesday, August 4th. Finally, TD Cowen lowered their price objective on Huntington Ingalls Industries from $360.00 to $340.00 and set a "buy" rating for the company in a research note on Friday, October 9th. Five equities research analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company's stock. Based on data from MarketBeat, Huntington Ingalls Industries presently has a consensus rating of "Moderate Buy" and an average target price of $361.75.

Insider Activity

In other Huntington Ingalls Industries news, CEO Christopher Kastner sold 13,070 shares of the company's stock in a transaction that occurred on Monday, August 10th. The shares were sold at an average price of $324.92, for a total transaction of $4,246,704.40. Following the completion of the sale, the chief executive officer directly owned 11,224 shares of the company's stock, valued at approximately $3,646,902.08. This represents a 53.80% decrease in their ownership of the stock. The sale was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 0.80% of the company's stock.

Institutional Inflows and Outflows

Several hedge funds have recently bought and sold shares of the company. Personal CFO Solutions LLC lifted its stake in Huntington Ingalls Industries by 3.7% in the 1st quarter. Personal CFO Solutions LLC now owns 775 shares of the aerospace company's stock valued at $294,000 after buying an additional 28 shares in the last quarter. Whittier Trust Co. grew its stake in Huntington Ingalls Industries by 2.5% during the 1st quarter. Whittier Trust Co. now owns 1,532 shares of the aerospace company's stock valued at $625,000 after acquiring an additional 38 shares in the last quarter. North Dakota State Investment Board boosted its holdings in shares of Huntington Ingalls Industries by 3.5% during the 3rd quarter. North Dakota State Investment Board now owns 1,199 shares of the aerospace company's stock worth $320,000 after purchasing an additional 40 shares during the last quarter. EverSource Wealth Advisors LLC increased its holdings in shares of Huntington Ingalls Industries by 3.0% in the first quarter. EverSource Wealth Advisors LLC now owns 1,523 shares of the aerospace company's stock valued at $579,000 after purchasing an additional 44 shares during the last quarter. Finally, Empirical Finance LLC grew its holdings in Huntington Ingalls Industries by 3.3% in the 2nd quarter. Empirical Finance LLC now owns 1,480 shares of the aerospace company's stock valued at $414,000 after buying an additional 47 shares in the last quarter. Institutional investors own 90.46% of the company's stock.

Huntington Ingalls Industries Price Performance

The stock's fifty day moving average price is $277.60 and its 200-day moving average price is $336.87. The company has a current ratio of 1.23, a quick ratio of 1.14 and a debt-to-equity ratio of 0.51. The firm has a market cap of $12.07 billion, a price-to-earnings ratio of 18.00, a P/E/G ratio of 1.02 and a beta of 0.21.

About Huntington Ingalls Industries

Huntington Ingalls Industries, Inc NYSE: HII is an American defense company that designs, builds, maintains and modernizes ships for the U.S. Navy and other government customers. Its shipbuilding activities include nuclear-powered aircraft carriers, submarines, amphibious assault ships, destroyers and other surface vessels, along with fleet sustainment and modernization services.

HII operates through its Newport News Shipbuilding and Ingalls Shipbuilding divisions. Newport News Shipbuilding is involved in the construction and maintenance of nuclear-powered aircraft carriers and submarines, while Ingalls Shipbuilding builds surface combatants and amphibious ships.

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