NEWPORT NEWS, Va. (February 9, 2023) - HII (NYSE:HII) reported fourth quarter 2022 revenues of $2.8 billion, up 5.0% from the fourth quarter of 2021. Operating income in the fourth quarter of 2022 was $105 million and operating margin was 3.7%, compared to $120 million and 4.5%, respectively, in the fourth quarter of 2021. Diluted earnings per share in the quarter was $3.07, compared to $2.99 in the fourth quarter of 2021.
For the full year, revenues of $10.7 billion increased 12.1% over 2021. Operating income in 2022 was $565 million and operating margin was 5.3%, compared to $513 million and 5.4%, respectively, in 2021. Segment operating income 1 in 2022 was $712 million and segment operating margin 1 was 6.7%, compared to $683 million and 7.2%, respectively, in 2021. Diluted earnings per share for the full year was $14.44, compared to $13.50 in 2021.
Net cash provided by operating activities in 2022 was $766 million and free cash flow 1 was $494 million, compared to $760 million and $449 million, respectively, in 2021.
New contract awards in the fourth quarter of 2022 were approximately $3.2 billion, bringing total backlog to approximately $47.1 billion as of December 31, 2022.
“2022 represented another year of steady progress on our ship programs and growth in our Mission Technologies division. We finished the year with strong fourth quarter cash generation, which keeps us on track to meet our 5-year free cash flow commitment of $2.9 billion from 2020-2024,” said Chris Kastner, HII’s president and CEO. "I’m looking forward to 2023, as we are expecting to deliver five ships, and we will continue to grow our Mission Technologies division, capitalizing on the significant $66 billion pipeline."
2023 Financial Outlook 2• Expect FY23 shipbuilding revenue 1 between $8.4 and $8.6 billion; expect shipbuilding operating margin 1 between 7.7% and 8.0%
• Expect FY23 Mission Technologies revenue of approximately $2.5 billion, segment operating margin 1 between 2.5% and 3.0%; and Mission Technologies EBITDA margin 1 between 8.0% and 8.5%
• Expect FY23 free cash flow 1 between $400 and $450 million 3 • Continue to expect cumulative FY20-FY24 free cash flow 1 of approximately $2.9 billion 31 Non-GAAP measures. See Exhibit B for definitions and reconciliations. In reliance upon Item 10(e)(1)(i)(B) of Regulation S-K, reconciliations of forward–looking GAAP and non–GAAP measures are not provided because we are unable to provide such reconciliations without unreasonable effort due to the uncertainty and inherent difficulty of predicting the future occurrence and financial impact of certain elements of GAAP and non-GAAP measures.
2 The financial outlook, expectations and other forward-looking statements provided by the company for 2023 and beyond reflect the company's judgment based on the information available at the time of this release.
3 Outlook is based on current tax law and assumes the provisions requiring capitalization of R&D expenditures for tax purposes are not deferred or repealed.
4101 Washington Ave. • Newport News, VA 23607 Page 1 of 12The following information was filed by Huntington Ingalls Industries, Inc. (HII) on Thursday, February 9, 2023 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.
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The favorable change in non-current state income taxes was primarily driven by a decrease in deferred state income tax expense, largely attributable to research and development expenses that are capitalized and amortized for tax purposes.
2022 - A favorable change in the non-operating retirement benefit of $95 million from 2021 to 2022 was primarily driven by higher 2021 returns on plan assets.
2021 - A favorable change in the non-operating retirement benefit of $62 million from 2020 to 2021 was primarily driven by higher 2020 returns on plan assets.
The unfavorable change of $333 million in operating cash flow was primarily due to unfavorable changes in trade working capital, partially offset by lower income tax payments and lower contributions to retiree benefit plans.
This decrease was primarily driven by favorable changes in current state income tax expense, partially offset by unfavorable changes in non-current state income tax expense and higher overhead costs driven by the acquisition of Alion.
