Huntington Ingalls Industries Inc. (HII): 2Q26 earnings callback; Buy

Research evidence excerpt

Huntington Ingalls Industries Inc. (HII): 2Q26 earnings callback; Buy

Equity Research

3 August 2026 | 10:20PM EDT

We hosted a group investor meeting with HII CFO Tom Stiehle. HII has drivers of Noah Poponak, CFA

+1(212)357-0954 |

multi-year strong top-line growth in shipbuilding, while margins now look to be noah.poponak@gs.com

Goldman Sachs & Co. LLC

turning the corner. We are Buy-rated.

Connor Dessert

+1(212)357-6166 |

connor.dessert@gs.com

Meeting takeaways Nizar Mesani

+1(212)934-6965 |

nizar.mesani@gs.com

Goldman Sachs India SPL

Shipbuilding revenue. In the last four quarters, Shipbuilding revenue has grown 16%

Amanda Fenenbock, CFA

- 20%. Over that time, HII has seen structural increases in customer demand, backlog +1(212)934-0385 |

growth, and has lifted the medium-term SB growth outlook from 3-4% annually to amanda.fenenbock@gs.comGoldman Sachs & Co. LLC

6%. While the demand is there, labor and supply chain inputs are needed to convert Tomas Russo

that demand into revenue. Both HII and the DoW are making investments to address +1(212)902-7439tomas.russo@gs.com|

those items, and HII is increasing outsourced work to accelerate throughput where Goldman Sachs & Co. LLC

possible. Newport wages benefited from Navy investment last June, while Ingalls

wages benefited from Navy investment in February / March. HII noted that labor

metrics (hiring, attrition, workforce skill) improved again in 2Q26, which should help

shipyard productivity.

Shipbuilding margins. The shipbuilding margin in 2Q26 was 6.3%, above the

company’s guide of 5.7-6.0%. That margin benefited from better shipyard

throughput and productivity, but had some help from incentives that were instituted

before the July 29 submarine contracts were unveiled. In addition to future