MCLEAN, Va. - HII (NYSE: HII) has been awarded a $3 billion contract to provide the U.S. Department of Defense (DOD) with logistics services, intelligence, surveillance, and reconnaissance (ISR) operations, and next-generation technology. This contract supports the DOD's Joint All-Domain Command and Control (JADC2) strategy, which aims to give the joint force an information and decision advantage to bolster U.S. national security.
The agreement, known as the Logistics Services, ISR Operations and Next-Gen Technology (LOGIX) task order, will see HII's Mission Technologies division working to enhance joint force capabilities and expedite the deployment of solutions. Andy Green, executive vice president of HII and president of HII's Mission Technologies division, stated that the company is dedicated to delivering all-domain solutions to foster innovation at a pace that matches the urgency of current global security threats.
HII has a history of similar collaborations with the U.S. Navy and the U.S. Army's Fixed Wing projects, providing a foundation for the expansion of support through the LOGIX task order. Todd Gentry, president of Mission Technologies’ All-Domain Operations group, emphasized HII's readiness to execute and expand their support to mission partners worldwide.
As a prominent all-domain defense provider, HII has a longstanding commitment to advancing U.S. national security, with a history extending over 135 years. The company is known for producing the nation's largest military ships and delivering comprehensive capabilities ranging from unmanned systems to cyber, ISR, AI/ML, and synthetic training. With a workforce of 44,000, HII is headquartered in Virginia and operates on a global scale.
This contract aligns with the DOD's focus on enhancing joint force capabilities through the integration of logistics, intelligence, and emerging technologies. HII's role will involve collaborating with DOD to deliver world-class intelligence and integrated logistics to inform decision-making in contested multi-domain environments.
The information for this article is based on a press release statement.
In other recent news, Huntington Ingalls Industries (NYSE:HII) has reported a record second-quarter revenue of $3 billion for 2024 and an increase in diluted earnings per share to $4.38. The company also announced an increase in its quarterly cash dividend to $1.35 per share, marking a rise from the previous $1.30 per share. In a significant strategic restructuring, HII transitioned its Mission Technologies division from six to four operational groups, following a period of substantial financial growth. Despite these positive developments, HII faced a downgrade from Wolfe Research due to labor difficulties and increased costs.
On the international front, China's foreign ministry imposed sanctions on HII, freezing their assets within China in response to U.S. arms sales to Taiwan. Nevertheless, HII secured several significant contracts, including a $75 million task order by the U.S. Navy for advanced integrated training systems and a $458 million contract to modernize the U.S. Department of Defense's IT networks. In terms of analyst ratings, TD Cowen maintained its Buy rating on HII, while JPMorgan (NYSE:JPM) shifted its rating from "Overweight" to "Neutral".
Finally, HII welcomed John Bell as the new chief technology officer (CTO) for its Mission Technologies division, a move aimed at bolstering the company’s technological advancements in defense. These are recent developments for Huntington Ingalls Industries.
InvestingPro Insights
HII's recent $3 billion contract win aligns well with its financial profile and market position. According to InvestingPro data, HII boasts a robust revenue of $11.78 billion over the last twelve months as of Q2 2023, with a healthy revenue growth of 8.04% during the same period. This substantial contract is likely to further bolster the company's top-line performance and reinforce its market position in the defense sector.
An InvestingPro Tip highlights that HII is trading at a low P/E ratio relative to its near-term earnings growth, with a current P/E ratio of 10.21. This suggests that the stock may be undervalued considering its growth prospects, which could be further enhanced by this significant contract win.
Another relevant InvestingPro Tip notes that HII has raised its dividend for 13 consecutive years, demonstrating a commitment to shareholder returns. With a current dividend yield of 2.08%, the company offers a blend of growth potential and income for investors.
For readers interested in a deeper analysis, InvestingPro offers 7 additional tips that could provide valuable insights into HII's investment potential.
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