What Happened?
Shares of aerospace and defense company Huntington Ingalls (NYSE: HII) jumped 9.1% in the morning session after it reported strong third-quarter results that surpassed Wall Street expectations. Revenue grew 16.1% year on year to $3.19 billion, beating analysts' forecasts. Earnings per share were $3.68, also outperforming predictions and showing a significant increase from the $2.56 reported a year earlier. Adding to the positive sentiment, Huntington Ingalls's backlog of future work grew 12.7% over the last year to $55.7 billion, indicating a solid pipeline of future business.
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What Is The Market Telling Us
Huntington Ingalls’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 12 months ago when the stock dropped 23.8% on the news that the company reported weak third-quarter earnings as its revenue and EPS missed Wall Street's estimates. The weak top line was a result of lower volume at Ingalls and Newport News Shipbuilding. Other challenges highlighted during the quarter include delays in the timing of a key submarine contract agreement with the Navy, which affected profitability and cash flow. Overall, this was a weaker quarter.
Huntington Ingalls is up 70.8% since the beginning of the year, and at $320.47 per share, has set a new 52-week high. Investors who bought $1,000 worth of Huntington Ingalls’s shares 5 years ago would now be looking at an investment worth $2,173.
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