Huntington Ingalls Industries on Thursday reported revenue of $1.86 billion in the second quarter of 2017, up by 9.3 percent from the $1.7 billion it reported during the same period last year. The shipbuilder collected $237 million in operating income – up from $217 million last year – and $186 million in cash from operations, compared to $169 million from the second quarter of 2016.
Diluted earnings per share in the quarter landed at $3.21, rising from $2.80 on a year-over-year basis.
The company attributed the increases primarily to higher sales volume in the Ingalls Shipbuilding business segment and last year’s acquisition of Camber Corp., a government services company with customers that include the U.S. Navy and Army.
Huntington Ingalls formed a new reporting segment last year, Technical Solutions, which includes its work for the Energy Department. Stoller Newport News Nuclear (SN3), a subsidiary within that business division, provides nuclear waste management and environmental services as one of the parent companies for Savannah River Nuclear Solutions, the contractor managing DOE’s Savannah River Site in South Carolina.
SN3 is also a partner in Mission Support and Test Services, the newly chosen management and operations contractor for the National Nuclear Security Administration’s Nevada National Security Site.
The total contract for the Honeywell-led team is valued at $5 billion over 10 years, with all options. Huntington Ingalls President and CEO Mike Petters said during a Thursday earnings call that SN3’s role in the Nevada deal amounts to roughly 23 percent of the contract value, totaling “south of $10 million a year.”
Petters noted that the company has not been able to grow its business from its partnership with Fluor at the Savannah River Site – the contract for which will expire at the end of next July. But he emphasized the win at the Nevada site and future opportunities.
“[W]e see the Department of Energy has a lot of those kinds of programs in front of it over the next 10 years. And we expect to be a bigger player. We’re certainly going to be a bigger player in that than we have been in the past,” he said. “And we expect that the ability now to connect the tremendous technical capability at the shipyard to those customers at the Department of Energy is going to be something that we’re going to be getting better and better at.”
Petters did not discuss specifics, but current or upcoming contract opportunities include separate procurements for management and operations at Savannah River and management of its liquid waste, as well as distinct deals for operation and legacy cleanup of the Los Alamos National Laboratory in New Mexico.
The Technical Solutions segment reported quarterly revenue of $244 million, up by 70.6 percent from $143 million during the same quarter of last year. Operating income for the segment was $9 million, up by $11 million from the loss reported the same time last year.
The company in its earnings release attributed the revenue increase to the Camber acquisition and “higher volumes in fleet support and oil and gas services.”
Stoller Newport News Nuclear has also performed DOE waste management services at the Hanford Site in Washington state, the Idaho National Laboratory, the Paducah Gaseous Diffusion Plant in Kentucky, and the Waste Isolation Pilot Plant in New Mexico.
