Consulting firm McAleese & Associates has issued a report saying Huntington Ingalls Industries (NYSE: HII) is œecstatic about the Bipartisan Budget Act™s shipbuilding funds for fiscal years 2018 and 2019.
œ[W]e are in a great spot because ships have been authorized and appropriated in the 2018-2019 window, which takes a lot of uncertainty about 2020-2021 out of our business, HII CEO Mike Petters said during the company™s third-quarter earnings call on Thursday, Nov. 8.
Petters told analysts that he is sticking to his 3 percent annual sales growth figure as the Defense Department plans to present two budgets for FY 2020, which he said indicates œuncertainty, Jim McAleese, founder and principal at McAleese & Associates, wrote in the report.
McAleese cited that HII believes DoD will support a contract for two aircraft carriers œon net-neutral funding basis.
œWhen we looked¦at the five-year plan¦for aircraft carriers, it was our view that you could reapportion that funding between the two ships, and actually generate the savings, and that you wouldn™t need to actually add any funding to make that happen, Petters said.
According to the report, HII will benefit from Navy shipbuilding funds worth $24B in the FY 2019 minibus measure, which authorizes the two-carrier contract and LPD Flight II amphibious ship advance procurement.
