Tuesday, April 3, 2012

Inside the Industrial Base:Navy Shipbuilder Has Successful Q4-and what they're doing now

Huntington Ingalls Industries,the former Northrop Grumman Shipbuilding,had outstanding earnings in Q4 2011.Alliance Bernstein gave the stock a price target of 51 dollars on margin expansion and transparency.It closed at 40.00 on Tuesday.The nation's sole builder of aircraft carriers,HII has built more ships in more classes than any other firm.
HII anticipates a new contract to build the John F. Kennedy carrier(CVN 79)in 2013.The JFK would be completed in the 2020-21 time frame.The company is already building five other ships to be delivered by 2015.The next 3-5 years are already under contract.By 2015,the firm will be back to normal business after the Hurricane Katrina disruption in 2005.
CEO Mike Petters said 2012 will be a lot like last year,with maybe a little better return because of retiring risk.Our attrition rates are historically low,Mr.Petters added.
HII is preparing to close its Avondale,Mississippi shipyard in 2013 unless it can find a joint venture partner,despite Mississippi's offer of an incentive package worth more than 200 million dollars to keep it open.Avondale's workforce has gone down from 5,000 to 3,300 workers so far.The yard is currently completing its final projects,which are two amphibious assault ships for transporting U.S. Marines and their equipment,the Anchorage(LPD 23) and the Somerset(LPD 25).
Once Avondale closes,the company will have two remaining shipyards at Newport News,Virginia and Pascagoula,Mississippi,respectively.The Gerald R. Ford aircraft carrier(CVN 78)is currently under construction at Newport News.
Huntington Ingalls Industries(HII)

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