Huntington Ingalls Industries reports drop in quarterly revenues

7 August 2020 (Last Updated August 7th, 2020 14:21)

US-based military shipbuilding company Huntington Ingalls Industries (HII) has reported a revenue of $2.02bn in the second quarter of the year.

Huntington Ingalls Industries reports drop in quarterly revenues
Huntington Ingalls Industries Headquarters in Newport News, Virginia. Credit: Huntington Ingalls Industries.

US-based military shipbuilding company Huntington Ingalls Industries (HII) has reported a revenue of $2.02bn in the second quarter of the year.

The figure represents a 7.4% drop from the $2.19bn registered in the same period a year ago.

The operating income of the company plummeted 67.4% from $175m in the second quarter of 2019 to $57m in 2020 Q2.

In the April to June period, net earnings of the company amounted to $53m, compared to $128m in the second quarter of 2019.

HII primarily attributed the fall to the cumulative catch-up adjustments, which amounted to $167m following revised cost and schedule assumptions across all programmes.

It includes a $61m hit resulting from Covid-19 induced delays and disruptions, as well as cost adjustments to the Virginia-class submarine programme.

HII president and CEO Mike Petters said: “As we discussed when we provided our first quarter results, staffing at our shipyards has been significantly impacted by the pandemic as we worked to preserve the significant investments in human capital that we have made over the past five years.

“As a result of the pandemic and our response, hourly production workforce attendance at our shipyards averaged approximately 65% during the second quarter.

“The delay and disruption from lower attendance, availability of critical skills, and out-of-sequence work caused by Covid-19 has impacted our ability to complete work as efficiently as initially planned and has added incremental programme costs and pushed schedules and milestones to the right, which is incorporated in our results and updated outlook for 2020.”

In the second quarter, HHI secured new contracts with a combined value of $2.9bn. It increases its total backlog to nearly $46.1bn.

Earlier this year, HHI signed an agreement to acquire underwater technology company Hydroid from Kongsberg Maritime.