Huntington Ingalls Secures $1.47B Deal To Construct LPD 30
Zacks Investment Research | Mar 26, 2019 09:45PM ET
Huntington Ingalls Industries Inc. (NYSE:HII) has recently secured a $1.47-billion modification contract for the construction of Landing Platform Dock (LPD) 30, the 14th amphibious transport dock of the San Antonio (LPD 17) class. The contract was awarded by the Naval Sea Systems Command, Washington, DC.
Majority of the work related to this deal will be performed in Pascagoula, MS, and is scheduled to be over by February 2025. The company will utilize fiscal 2018 shipbuilding and conversion (Navy) funds for the task.
San-Antonio Class Ships & LPD 30
With a length of 684 feet and width of 105 feet, the San Antonio-class ships are designed to deliver equipment and supplies ashore to the U.S. Navy, using air cushion or conventional landing craft and amphibious assault vehicles. These, in turn, are supported by helicopters or vertical takeoff and landing aircraft such as the MV-22 Osprey.
The LPD 17 class ships replace the functions of more than 41 amphibious ships, and provide the Navy and Marine Corps with modern, networked and
survivable sea-based platforms. Impressively, the construction of the newest LPD 30 is expected to further strengthen the Navy and Marine Corps’ future warfare requirements.
Our View
The fiscal 2019 defense budget provisioned for shipbuilding investment of $18.4 billion. Huntington Ingalls specializes in manufacturing amphibious
assault and expeditionary ships. The company also provides more than 70% ships to the U.S. Navy. Therefore, such budgetary developments should enable the company to procure more significant contracts related to ship construction, like the latest one.
Interestingly, per Technavio, the global naval shipbuilding market is expected to see a CAGR of 2% from 2019 to 2023. This, in turn, should increase the demand for various assault ships, including the LPD’s. Huntington Ingalls, being a major shipbuilding giant, should benefit from such favorable projections, going forward.
Price Performance
Shares of Huntington Ingalls have plunged about 20.2% in a year compared with the Zacks Investment Research
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