Huntington Ingalls Industries, Inc. (NYSE:HII) Q3 2023 Earnings Call Transcript

Gautam Khanna: Hey. Good morning, guys.

Christopher D. Kastner: Good morning, Gautam.

Gautam Khanna: Hey. Quick question. On LPD 29, I just curious your confidence level on that getting, delivered this quarter. Is it a very late in the quarter kind of skew? And just how, if you could give us some framework on what the EAC sensitivity is to that in the fourth quarter?

Christopher D. Kastner: Yes. So Gautam, it’ll be a race to the finish on 29. We need to get through the final trials, get in serve in, get it approved and delivered. There’s some sensitivity, obviously, as we come through the final, throws on that ship from an EAC standpoint. And then a lot will depend on how much work remains subsequent to delivery. I don’t have a specific range for you, but we tend to, as you know, we tend to risk adjust our opportunities as we flow towards the end of the year and LPD 29 is right in the middle of that risk profile.

Gautam Khanna: Gotcha. Okay. So would you argue that the implied shipbuilding range for Q4 bounds that risk? Because it is a pretty wide margin range, obviously, that’s implied shipbuilding.

Christopher D. Kastner: Yes. I don’t want to comment on that. There’s a lot of variables go into that that range, Gautam. LPD 29 is one of those variables.

Gautam Khanna: Okay. And just, wanted to get your sense on given all the labor challenges that you guys have faced on over the last couple of years, what is kind of an appropriate margin increase rate shipbuilding next year. Like, what would be a good scenario or a realistic scenario? I mean, are we talking, like, 10, 20 basis points? Are we talking, a more significant step up, next year in shipbuilding?

Christopher D. Kastner: Yes. So we’re not going to give specifics on improvement in 2024. We’ll give that on our year-end call. But I do continue to expect improvement. I just think it’s a bit premature. Let’s get through the end of the year, see how we close-up, close strong, and then we’ll give you information on the year-end call.

Gautam Khanna: All right. Thank you very much guys. Appreciate it.

Christopher D. Kastner: Sure. Thanks, Gautam.

Operator: Thank you. There are no further questions at this time. So, I’d now hand the call back to Mr. Kastner for any closing remarks.

Christopher D. Kastner: Sure. Thanks for joining us on the call. Before we wrap up, I’d like to note that we’ll be hosting Investor Day on March 20th in New York. So, be on the lookout for more information. Thanks again for your interest in HII and joining us on today’s call.

Operator: That concludes today’s conference for everybody. Thanks very much for joining. You may now disconnect your lines. Have a great rest of your day.