Huntington Ingalls Industries, Inc. (HII) Business Profile

What it does

Huntington Ingalls Industries, or HII, designs, builds and maintains naval ships and provides defense technology and services. Its principal customer is the U.S. government, especially the U.S. Navy. The company was founded in 2011, is headquartered in Newport News, Virginia, and is led by President and Chief Executive Officer Christopher D. Kastner.

HII has two shipbuilding businesses. Ingalls Shipbuilding, in Mississippi, builds non-nuclear vessels such as amphibious assault ships and destroyers. These ships carry Marines and equipment or provide capabilities for naval operations. Ingalls also provides ship repair and maintenance. Newport News Shipbuilding, in Virginia, designs and builds nuclear-powered aircraft carriers and submarines. It also refuels, overhauls, repairs and eventually inactivates aircraft carriers.

Its third business, Mission Technologies, supplies systems and services for military and other government missions. These include intelligence and communications systems, cybersecurity, training, fleet modernization and unmanned vessels. It also supports nuclear operations and provides unmanned systems for marine research and commercial applications.

HII takes several roles on defense programs: it may hold the main contract, work as a subcontractor or share work with another company. Its activities extend beyond delivering a ship to maintaining and modernizing vessels during their service lives.

How it makes money

HII generates most of its revenue from long-term U.S. government contracts to produce goods and provide services. Shipbuilding work includes designing and constructing vessels; services include maintenance, modernization, training and technology support. The company can earn work as a prime contractor or as a subcontractor to another prime.

Ingalls earns revenue from non-nuclear ships and related repair and maintenance. Newport News builds nuclear-powered carriers and submarines and performs carrier refueling and complex overhauls. Mission Technologies sells systems, unmanned vehicles and services ranging from cybersecurity and intelligence support to fleet modernization and nuclear operations.

Contracts use several pricing structures. Under a firm fixed-price contract, the agreed price generally does not change with the contractor’s costs. Fixed-price incentive contracts reimburse allowable costs subject to a cost-sharing limit; once that limit is reached, they effectively become firm fixed-price contracts. Cost-type contracts reimburse allowable costs plus a fee, while time-and-materials contracts use fixed hourly labor rates and reimburse allowable material costs and expenses.

Profit depends on the contract’s negotiated fees and cost-sharing terms, as well as performance against objectives such as cost, schedule, quality and technical requirements. Revenue recognition depends on factors including contract costs, cost estimates and deliveries. Changes in estimated costs at completion can alter contract profit recognition.

Work can continue after a vessel is delivered. Newport News provides carrier fleet support and is the exclusive prime contractor for nuclear carrier refueling and complex overhauls. Each overhaul takes nearly four years, while fleet support includes ongoing maintenance services worldwide. Mission Technologies also supports vessels over their life cycles.

In the third quarter of 2026, HII reported approximately $3.5 billion in revenue.

Customers and how it sells

The U.S. government provides most of HII’s revenue. Its customers include the Navy, Coast Guard, Department of Energy and other federal agencies. The Navy generated approximately 81% of HII’s revenue in 2025. HII participates in government programs directly as a prime contractor and indirectly as a subcontractor, team member or partner.

Ingalls builds non-nuclear ships for the Navy and Coast Guard at Pascagoula, Mississippi. Newport News designs and builds nuclear-powered carriers and submarines at its Virginia shipyard. For Virginia-class submarines, HII shares construction and alternating final assembly and delivery responsibilities with General Dynamics’ Electric Boat. On Columbia-class submarines, HII works as a subcontractor to Electric Boat.

Mission Technologies serves military, intelligence and federal customers with technology, training and support services. Its unmanned-systems business also serves marine research and commercial customers, with customers in more than 30 countries. HII provides fleet support for U.S. Navy nuclear ships worldwide through mobile and in-house capabilities.

Suppliers and costs

HII relies on third parties for raw materials and components. Some government contracts require it to buy particular materials and parts from government-approved sources. The company has experienced challenges with the availability and pricing of materials, components and other supplies, and uses measures such as long-term supplier agreements and price-escalation provisions in some customer contracts.

Its shipbuilding operations are capital- and skilled-labor-intensive. Contract costs include direct materials, labor and subcontracting, as well as certain indirect costs. Government rules determine which costs are allowable and how they are allocated; costs deemed unallowable cannot be recovered or must be refunded if already reimbursed.

Labor shortages and retention challenges have affected HII and its supply chain, contributing to longer lead times. HII also faces regulatory and compliance costs associated with government contracting, cybersecurity, environmental protection and nuclear operations. It expects to need additional shipbuilding capacity and identifies investment in existing yards, qualified personnel, third-party production support and process efficiencies as potential approaches.

For the Navy’s medium unmanned surface vessel program, HII works with Breaux Brothers and Halimar on hull, mechanical and construction work, and with Applied Intuition and Greenroom Robotics on autonomy technology.

Competitive position

HII’s Newport News and Ingalls businesses compete primarily with General Dynamics, as well as smaller shipyards on certain non-nuclear programs. HII and General Dynamics also work together: Electric Boat, a General Dynamics division, shares Virginia-class submarine construction with HII and is the prime contractor for Columbia-class work on which HII is a subcontractor. Defense companies can compete for one contract while serving as a supplier or customer on another.

HII is the sole builder of amphibious assault ships for the U.S. Navy and one of two builders of its surface combatants. It is also one of two U.S. companies capable of designing and building nuclear-powered submarines. HII is the only company currently capable of building, refueling and inactivating the Navy’s nuclear-powered aircraft carriers.

Our reading: HII’s exclusive carrier capabilities are a strong competitive advantage because nuclear expertise and capital-intensive facilities are required. Our reading: Its submarine and destroyer positions also limit the field of capable builders, although HII shares those markets with another builder and competes for programs and funding.

The government periodically considers whether carrier refueling should be performed in private or public facilities. HII says its position would likely be significantly affected if a government shipyard became capable of and engaged in that work. Mission Technologies competes with traditional aerospace and defense companies and non-traditional defense technology companies; differentiated technology and competitive rates are key factors.

Growth opportunities

HII’s growth opportunities include new ship construction, maintenance and modernization of existing vessels, and defense technology programs. The fiscal year 2026 National Defense Authorization Act supports shipbuilding programs including carriers, submarines and destroyers. It also authorizes two future aircraft carriers and provides advance construction and procurement authorities.

In the third quarter of 2026, HII received $32.4 billion in new contract awards, including submarine and carrier-related work. Total backlog reached $86.2 billion. Those figures exclude the $5.1 billion contract for the refueling and complex overhaul of USS Harry S. Truman, which HII expected to recognize in fourth-quarter results. HII also reported that shipbuilding throughput had increased approximately 9% year to date over 2025.

HII raised its 2026 shipbuilding revenue expectation to between $10.5 billion and $10.7 billion. It expects to need more shipbuilding capacity and is considering investment, staffing, third-party production support and production efficiencies to help meet demand.

Mission Technologies offers another route for growth through unmanned systems and technology services. HII received an award for 10 ROMULUS unmanned surface vessels for the Navy, with partners supporting construction and autonomy. It has also expanded its Massachusetts autonomous-systems facility to increase manufacturing, testing and integration capacity. HII expects unmanned vessels to become a greater part of its portfolio while large ships remain part of the business.

Structural risks

• Government dependence and funding: HII depends on the U.S. government for substantially all of its business. Delayed or reduced appropriations, shutdowns and changes in customer priorities or requirements can affect programs and future opportunities.
• Contract costs and estimates: Cost growth that does not produce higher contract prices reduces profit. HII must estimate costs over long-running programs; changes in estimated costs at completion affect recognized contract income. The government can also terminate contracts for convenience or default.
• Labor and capacity: HII’s ability to increase throughput and meet schedules depends on labor availability and performance. It needs to attract, retain and train qualified workers, while labor shortages and retention challenges also affect suppliers.
• Supply chain: Raw-material and component availability, supplier performance, delivery delays and price increases can disrupt production. Certain materials and components must come from government-approved sources.
• Regulatory and nuclear exposure: Government contracting, cybersecurity, environmental and nuclear requirements increase compliance costs and risks. Noncompliance can lead to penalties, repayment, loss of contract opportunities or operational restrictions; nuclear operations also carry potential incident and environmental liabilities.

Bottom line

Our reading

HII is a long-cycle naval shipbuilder with a technology and services business alongside it. Its specialized carrier and submarine capabilities support its position, while the Navy’s share of revenue ties the business closely to government funding and procurement choices.

Large contract awards provide work to execute, but turning that work into revenue and profit depends on labor, suppliers, schedules and contract cost estimates. Maintenance and overhaul services give HII work beyond initial ship delivery.