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Huntington Ingalls Industries' CEO Discusses Q2 2012 Results - Earnings Call Transcript

As a reminder, statements made in today’s call that are not historical fact are considered forward-looking statements and are made pursuant to the Safe Harbor provisions of federal securities law. Actual results may differ. Please refer to our SEC filings for a description of some of the factors that may cause actual results to vary materially from anticipated results.

Also in their remarks today, Mike and Barb will refer to non-GAAP measures, including segment operating income and segment operating income. Reconciliations of these metrics to the comparable GAAP measures are included in the appendix of our earnings presentation that is posted on our website.

We plan to address the posted presentation slides during the call to supplement our comments. Please access our website at and click on the Investor Relations link to view the presentation, as well as our earnings release.

With that, I’d like to turn the call over to Mike.

Mike Petters

Thanks Andy. Good morning everyone and thanks for joining us on today’s call. I am pleased to report Huntington Ingalls Industries’ results for the second quarter of 2012. Today we reported sales of $1.72 billion, up 10.1% from the same period last year, and diluted earnings per share of $1.00, up from $0.80 in the second quarter of 2011. Second quarter segment operating margin was 7.4%, a significant improvement from 6.3% last year, and we ended the quarter with $669 million of cash on the balance sheet. Total backlog was $16.2 billion, of which $12.6 billion is funded.

During the second quarter, we continued to execute well on all major programs at both Ingalls and Newport News, including achieving several milestones. At Ingalls, we launched two ships – the amphibious assault ship LHA-6 America, and LPD-25 Somerset. We successfully completed acceptance trials for LPD-23 Anchorage, a ship that will be delivered to the Navy next month, and we announced the construction contract for the newest amphibious assault ship, LHA-7 Tripoli. Subsequent to quarter-end, we announced the $1.5 billion construction contract for LPD-27, the 11 th ship in the San Antonio class of LPDs.

At Newport News, the submarine and carrier programs continued to perform well and our outlook for these programs remains positive. In fact, we are in the preparation phase for a significant amount of new business, including the next block buy of submarines, the inactivation of CVN-65 Enterprise, the refueling of CVN-72 Lincoln, and the construction of CVN-79 Kennedy.

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