AI Takeaway
HII reported Q1 2026 revenue of $3.10B (+13.4% YoY) driven by strong top-line growth, but operating income declined 3.7% to $155M as margin compression offset volume gains, while net income held flat at $149M and operating cash flow remained deeply negative at -$390M.
Revenue
$3.1B
++13.35% YoY
EPS (Basic)
$3.79
0.00% YoY
Operating Income
$155M
-3.73% YoY
Filed · Source: SEC EDGAR 10-Q filing
HII generated $3.10B in revenue for Q1 2026, up 13.4% from $2.73B in Q1 2025, reflecting robust demand for naval shipbuilding and defense services. This top-line expansion signals continued contract execution momentum.
Source: Source: 10-Q Income Statement, Q1 2026
Despite higher revenues, operating income fell 3.7% to $155M, pushing operating margin down approximately 90 basis points to 5.0% from 5.9% in Q1 2025. This suggests cost pressures — likely labor, materials, or program execution challenges — are outpacing revenue growth.
Source: Source: 10-Q Income Statement & Key Ratios, Q1 2026
Net income remained unchanged at $149M YoY, with EPS (both basic and diluted) holding steady at $3.79. The flat bottom line despite a 13.4% revenue increase points to rising costs and/or below-the-line items absorbing the incremental revenue.
Source: Source: 10-Q Income Statement, Q1 2026
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Upgrade to unlockHII's operating margin contracted from 5.9% to 5.0% YoY despite a 13.4% revenue increase, indicating that cost growth is outpacing revenue. If this trend continues, profitability could erode further even as the company wins more contracts. Shipbuilding cost overruns and labor inflation are likely contributors.
Source: Source: 10-Q Income Statement & Key Ratios, Q1 2026
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Upgrade to unlockReported EPS of $3.79 versus the $3.76 analyst consensus — a +0.9% beat for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $3.1B | $2.73B | +13.35% |
Operating Income | $155M | $161M | -3.73% |
Net Income | $149M | $149M | 0.00% |
EPS (Basic) | $3.79 | $3.79 | 0.00% |
EPS (Diluted) | $3.79 | $3.79 | 0.00% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $12.53B | $12.1B | +3.55% |
Current Assets | $3.22B | $3.04B | +5.75% |
Total Liabilities | $7.39B | $7.33B | +0.76% |
Current Liabilities | $2.7B | $2.86B | -5.39% |
Long-Term Debt | $2.7B | $2.7B | +0.07% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $-390M | $-395M | +1.27% |
Investing Cash Flow | $-71M | $-199M | +64.32% |
Financing Cash Flow | $-97M | $-70M | -38.57% |
D&A | $76M | $79M | -3.80% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 5.0% | 5.9% | -0.89% |
Net Margin | 4.8% | — | — |
ROA | 1.2% | — | — |
Current Ratio | $1.191 | — | — |
Other companies in Aerospace & Defense
HII reported Q1 2026 EPS of $3.79 (basic and diluted), flat versus Q1 2025. Without consensus analyst estimate data in the filing, it is not possible to confirm whether HII beat, met, or missed Wall Street expectations based solely on the 10-Q filing.
HII's Q1 2026 results showed strong revenue growth of 13.4% to $3.10B, but operating income fell 3.7% to $155M as costs rose faster than sales, compressing operating margin to 5.0% from 5.9%. Net income and EPS were both flat YoY at $149M and $3.79 respectively, while operating cash flow remained deeply negative at -$390M.
HII's operating margin fell from approximately 5.9% in Q1 2025 to 5.0% in Q1 2026, a decline of about 90 basis points, even as revenue grew 13.4%. This suggests that cost pressures — likely including labor inflation, material costs, or program execution challenges on shipbuilding contracts — grew faster than revenues during the quarter.
HII's balance sheet shows total assets of $12.53B against total liabilities of $7.39B, with $2.70B in long-term debt that is essentially unchanged YoY. The current ratio of 1.19 indicates adequate but thin short-term liquidity, and the company's persistent negative operating cash flow (-$390M in Q1 2026) is the primary financial health concern to monitor.
HII's revenue grew 13.4% YoY to $3.10B in Q1 2026, up from $2.73B in Q1 2025, reflecting strong demand for its naval shipbuilding and defense services. However, this revenue growth did not translate into earnings growth, as net income remained flat at $149M due to rising costs.