Feb. 2, 2024

HII’s Weekly News Digest is compiled every Friday by the Corporate Communications team to summarize and highlight news stories of significance to the company.

HII Reports Fourth Quarter and 2023 Full Year Earnings: Defense Daily reported on Thursday that each of HII’s operating segments reported higher profits during the fourth quarter of 2023. The company’s overall sales grew 13% in the quarter to a record $3.2 billion from $2.8 billion a year ago, led by strong double-digit increases in the Mission Technologies and Ingalls Shipbuilding segments. For all of 2023, sales increased 7% to a record $11.5 billion from $10.7 billion a year ago due to growth across the segments. Shipbuilding sales were nearly $8.9 billion in 2023, ahead of HII’s most recent guidance of between $8.5 billion and $8.6 billion provided last November. Inside Defense reported on Thursday that HII made progress with hiring in 2023 — bringing in over 6,900 craft personnel — and set a goal of hiring approximately 6,000 more in 2024. CEO Chris Kastner told participants during the company’s earnings call that HII is investing in several new initiatives to attract and retain labor, including targeting specific geographical regions for hiring and ensuring work schedules are flexible for new personnel.

NNS Wins $913 Million Overhaul Contract for USS Harry S. Truman (CVN 75): Breaking Defense reported on Monday that HII’s Newport News Shipbuilding division was awarded a $913 million contract to begin planning for the comprehensive mid-life overhaul of the aircraft carrier USS Harry S. Truman (CVN 75). The refueling and complex overhaul, also known as an RCOH, is a major milestone for each U.S. Navy aircraft carrier that will extend the ship’s life another 25 years. USNI News reported on Friday that the advanced procurement work is set to be completed in 2026. The announcement did not set a time frame for Truman to arrive at Newport News. Currently, USS John C. Stennis (CVN 74) is at the shipyard undergoing its own RCOH. USS George Washington (CVN 73) completed its RCOH last year.

Lawmakers Call For Maritime Policy Czar: USNI News reported on Tuesday that a bipartisan group of lawmakers is calling on President Joe Biden to create a maritime czar to organize American seapower and maritime policy. The letter cites China’s aggression in the maritime space and strains on the United States’ shipbuilding infrastructure. The letter asks Biden to create an “interagency maritime policy coordinator” who can synchronize policy across the defense, commercial and civilian realms. It also requests a presidential determination that establishes commercial, civil, and military shipbuilding and shipping industries — along with their associated infrastructure and workforces — as “critical infrastructure sectors,” making them eligible for investments under the Defense Production Act Title III authorities. Defense News reported on Tuesday that Sen. Mark Kelly, D-Ariz., and Rep. Michael Waltz, R-Fla., headed a Jan. 29 letter signed by 19 lawmakers from both parties and chambers. The letter, however, does not include the lawmakers leading the Senate and House armed services committees, nor does it include the chairmen and ranking members of those panels’ respective seapower subcommittees.

Contractors Wary Of Some Pentagon Contracts: The Wall Street Journal reported on Tuesday that defense contractors are avoiding Defense Department projects that present a high risk for cost overruns. The article cites Northrop Grumman’s reported $1.2 billion charge on the B-21 Raider as a prime example of the industry’s discontent with such contracts. Inflation, pandemic-driven supply-chain challenges and labor shortages have all made the first planes pricier to make than what Northrop had expected when it won the B-21 contract over Boeing and Lockheed Martin. Northrop reportedly won’t bid on an Air Force program to develop high-end jet fighters that will replace the radar-evading F-22. Executives said the balance between risk and reward from some deals has swung too far toward the Pentagon, pushing them to avoid projects that could fuel growth. “I will sacrifice revenue for earnings and cash every day of the year,” said L3Harris Technologies CEO Chris Kubasik, during the company’s Jan. 23 earnings call. Pentagon leaders said they are taking steps to alleviate future problems with more flexible contracts. The defense budget for fiscal year 2023, which ended Sept. 30, included a pot of more than $1 billion to compensate contractors for inflation, although little has been paid out.

Coast Guard Seeks Data Analytics Tools: Defense Daily reported on Tuesday that the Coast Guard’s demand for better data capabilities has been growing under Commandant Adm. Linda Fagan. Shortly after Fagan became commandant in June 2022, the Coast Guard stood up an Office of Data and Analytics to create governance structures and to better house its data. Fagan said last spring that the service’s data had been stove-piped and difficult to access because “we have not valued our data.” Last year, the U.S. Coast Guard began receiving regular data and information from unmanned surface vessels in the Atlantic and Pacific Oceans. While the data provided the service more knowledge of sea events and the sea environment, generating lessons from the use of those USVs has been difficult, in part due to a lack of data analytics, she said.

HII’s Weekly News Digest is produced by HII’s Corporate Communications team and posted to Homeport every Friday.

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