Huntington Ingalls Industries (HII) closed out 2025 with solid financial growth and measurable improvements across its shipbuilding operations, underscoring progress in an industrial base under intense pressure to deliver warships at a faster
Huntington Ingalls said on Thursday that it had expected free cash flow for the current quarter to be negative, despite beating quarterly profit estimates, sending its shares down 11% at midday.
CEO Chris Kastner said on a post-earnings call that the negative cash flow represented use of about $600 million, "as some of the fourth-quarter working capital benefit unwinds".
Rising global tensions are driving up demand for Huntington Ingalls' nuclear-powered Columbia-class submarines, and the company is also positioned to benefit from U.S. President Donald Trump's push to expand the country's shipbuilding to counter China.
Trump in December unveiled plans for a new, more powerful "Trump class" of battleships as part of a broader naval buildup, a move that also increases scrutiny on defense contractors over delays and cost overruns.
Huntington also expects 2026 shipbuilding revenue between $9.7 billion and $9.9 billion, and sees shipbuilding operating margin between 5.5% and 6.5%. Analysts said that the stock would lag on Huntington's soft operating forecast.
"The bar was higher for HII after a strong run in the stock, and while this 2026 guidance may ultimately prove conservative, our first reaction is that these results and outlook will not clear that higher bar today,"
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