Why Defense Company Huntington Ingalls Shares Are Diving Today
Portfolio Pulse from Lekha Gupta
Huntington Ingalls Industries Inc (NYSE:HII) reported first-quarter FY24 results with a 4.9% Y/Y increase in sales and service revenue to $2.81 billion, surpassing the consensus of $2.79 billion. EPS rose 19.8% Y/Y to $3.87, beating the consensus of $3.49. Operating income grew 9.2% Y/Y to $154 million. The company saw strong growth in Mission Technologies and stable shipbuilding progress, reiterating its FY24 outlook with expected Shipbuilding revenue of $8.8 billion-$9.1 billion and Mission Technologies revenue of $2.70 billion-$2.75 billion. Despite these positive results, HII shares dropped 11.03% to $246.35. Investors can also gain exposure to HII through Global X Funds Global X Defense Tech ETF (NYSE:SHLD) and First Trust Indxx Aerospace & Defense ETF (NYSE:MISL).
May 02, 2024 | 4:01 pm
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NEGATIVE IMPACT
Huntington Ingalls reported strong Q1 FY24 results with revenue and EPS growth, but shares fell 11.03%.
Despite surpassing revenue and EPS expectations, HII shares dropped significantly, likely due to market reactions to the negative free cash flow and possibly already high expectations priced in.
CONFIDENCE 90
IMPORTANCE 90
RELEVANCE 100
NEUTRAL IMPACT
First Trust Indxx Aerospace & Defense ETF (MISL) includes Huntington Ingalls, which announced positive Q1 FY24 earnings.
MISL, as an investor in HII, might see an indirect impact from HII's earnings report. However, the diversified nature of ETFs means HII's results have a diluted effect on MISL's overall performance.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50
NEUTRAL IMPACT
Global X Funds Global X Defense Tech ETF (SHLD) offers exposure to Huntington Ingalls, which reported strong Q1 FY24 results.
SHLD, holding HII, may see indirect impact from HII's performance. The ETF's diversified nature dilutes the direct effect of HII's stock movements.
CONFIDENCE 75
IMPORTANCE 60
RELEVANCE 50