HII Awarded $458 Million Contract for DoD IT Modernization
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On Wed, 2 Oct, 12:02 AM UTC
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HII secures $458 million DoD IT modernization contract By Investing.com
MCLEAN, Va. - Huntington Ingalls Industries (NYSE: NYSE:HII) has been awarded a $458 million contract to modernize the U.S. Department of Defense's communications and information technology networks, a move aimed at enhancing rapid decision-making capabilities in the battlespace. The contract was announced today and involves HII's Mission Technologies division. Under the five-year task order, HII will develop and implement new technical solutions to bolster system security against cyber threats, introduce advanced capabilities, and facilitate cloud migration. These improvements are designed to provide U.S. Department of Defense service components and the U.S. Special Operations Command with robust IT services and solutions to support warfighters in the field. Andy Green, executive vice president of HII and president of Mission Technologies, expressed the company's commitment to advancing the IT transformation goals of the U.S. government and ensuring a direct, positive impact on front-line warfighters. The modernization efforts will include model-based systems engineering focusing on communication hardware prototyping, waveform development, mobile ad-hoc network aerial relay solutions, and deployable communication kits. Additionally, the team will work on spectrum and bandwidth management and develop capabilities to modernize communications and data analytics at the tactical edge. Todd Gentry, president of Mission Technologies' C5ISR business group, highlighted the importance of equipping warfighters with integrated ISR capabilities to achieve information superiority, which is critical for homeland defense and protecting U.S. interests abroad. The task order was awarded under the Department of Defense's Information Analysis Center Multiple Award Contract (MAC) vehicle, managed by the U.S. Air Force's 774th Enterprise Sourcing Squadron. This program aims to enhance the Defense Technical Information Center repository and support the research and development community within the DoD. HII is a global defense provider, known as the nation's largest military shipbuilder, and employs a workforce of 44,000. The company's extensive portfolio includes ships, unmanned systems, cyber, ISR, AI/ML, and synthetic training solutions. This contract announcement is based on a press release statement and reflects the author's views, not necessarily those of the Department of Defense. In other recent news, Huntington Ingalls Industries (HII) has been the subject of several noteworthy developments. TD Cowen has reaffirmed its Buy rating on HII, maintaining a steady price target of $290.00, despite anticipating a $500 million reduction in future cash flow projections for 2024 due to delayed negotiations for 17 submarines with the U.S. Navy. The firm also predicts potential adjustments to earnings per share estimates due to increased sales from the company's Mechanical Tubing segment. HII has also secured an expanded credit facility of $1.7 billion, as well as a record second-quarter revenue of $3 billion for 2024, reflecting a 6.8% increase from the previous year. The company reported a rise in diluted earnings per share to $4.38, up from $3.27 in the same quarter of 2023. In addition, HII has been awarded several contracts, including a $30 million task order to support the U.S. Air Force's presidential and executive aircraft fleet, and a $209 million contract for the support of the U.S. Air Force's fighter and bomber weapons systems. However, JPMorgan (NYSE:JPM) has shifted its rating from "Overweight" to "Neutral" for HII, citing concerns about near-term confidence, while increasing its price target for the company's stock to $285. HII has also delivered two REMUS 620 uncrewed underwater vehicles to the National Oceanic and Atmospheric Administration for high-resolution ocean floor mapping. These are among the recent developments for HII. Huntington Ingalls Industries' recent $458 million contract award aligns with its strong financial performance and market position. According to InvestingPro data, HII boasts a market capitalization of $10.36 billion and a revenue of $11.78 billion over the last twelve months as of Q2 2024, with a notable revenue growth of 8.04% during the same period. An InvestingPro Tip highlights that HII is trading at a low P/E ratio relative to its near-term earnings growth, with a current P/E ratio of 13.98. This suggests that the stock may be undervalued considering its growth prospects, which could be further bolstered by this significant contract win. Another InvestingPro Tip reveals that HII has raised its dividend for 12 consecutive years, demonstrating a commitment to shareholder returns. This is particularly noteworthy given the company's ability to secure large government contracts while maintaining a strong dividend policy. For investors seeking a deeper understanding of HII's financial health and growth potential, InvestingPro offers 7 additional tips, providing a comprehensive analysis of the company's prospects in the defense sector.
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HII is Awarded a $458 Million Contract to Modernize IT Architecture for U.S. Department of Defense - Huntington Ingalls Indus (NYSE:HII)
McLEAN, Va., Oct. 01, 2024 (GLOBE NEWSWIRE) -- HII HII announced today that its Mission Technologies division was awarded a $458 million contract to modernize communications and information technology (IT) networks for the U.S. government that will enable rapid decision-making in the battlespace. Under the task order, HII will develop, assess and implement innovative technical solutions that will improve system hardening to potential cyber threats, introduce new capabilities and enable cloud migration. The enhancements will provide end users, including U.S. Department of Defense service components and the U.S. Special Operations Command, with IT services and solutions to support the warfighters. "We are honored by the customer's trust in HII and our approach," said Andy Green, executive vice president of HII and president of Mission Technologies. "As we advance their IT transformation goals, we are committed to delivering cutting-edge expertise and solutions that will have a direct, positive impact on our front-line warfighters." A photo accompanying this release is available at: https://hii.com/news/hii-is-awarded-a-458-million-contract-to-modernize-it-architecture-for-u-s-department-of-defense/. Through the communications and IT modernization effort, HII will use model-based systems engineering to focus on communication hardware prototyping, waveform development, mobile ad-hoc network aerial relay solutions, payloads and deployable communication kits. The team will also support spectrum and bandwidth management and will develop capabilities to modernize communications and data analytics at the tactical edge. "Equipping our warfighters with access to integrated ISR capabilities will help them to achieve information superiority in support of homeland defense and the protection of U.S. interests abroad," said Todd Gentry, president of Mission Technologies' C5ISR business group. HII was awarded the task order under the Department of Defense's Information Analysis Center Multiple Award Contract (MAC) vehicle. These U.S. Department of Defense's Information Analysis Center (IAC) Multiple Award Contract vehicle task orders are awarded by the U.S. Air Force's 774th Enterprise Sourcing Squadron to develop and create new knowledge for the enhancement of the Defense Technical Information Center repository and the research and development and science and technology community. The task order has a five-year term. About HII HII is a global, all-domain defense provider. HII's mission is to deliver the world's most powerful ships and all-domain solutions in service of the nation, creating the advantage for our customers to protect peace and freedom around the world. As the nation's largest military shipbuilder, and with a more than 135-year history of advancing U.S. national security, HII delivers critical capabilities extending from ships to unmanned systems, cyber, ISR, AI/ML and synthetic training. Headquartered in Virginia, HII's workforce is 44,000 strong. For more information, visit: HII on the web: https://www.HII.com/HII on Facebook: https://www.facebook.com/TeamHIIHII on X: https://www.twitter.com/WeAreHIIHII on Instagram: https://www.instagram.com/WeAreHII The DoD IAC, sponsored by the Defense Technical Information Center, provides technical data management and research support for DoD and federal government users. Established in 1946, the IAC program serves the DoD science and technology and acquisition communities to drive innovation and technological developments by enhancing collaboration through integrated scientific and technical information development and dissemination for the DoD and broader science and technology community. This material is based upon work supported by the DoD Information Analysis Center Program (DoD IAC), sponsored by the Defense Technical Information Center (DTIC) under Contract No. FA807518D0002. Approved for Public Release, Distribution Unlimited. Any opinions, findings and conclusions or recommendations expressed in this material are those of the author(s) and do not necessarily reflect the views of the DoD. Greg McCarthy (202) 264-7126 gregory.j.mccarthy@hii-co.com A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/87b9a504-87a2-41d0-a930-7fecc86724d1 Market News and Data brought to you by Benzinga APIs
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HII, a global defense and technologies partner, has secured a significant $458 million contract to modernize the IT architecture for the U.S. Department of Defense. This five-year contract aims to enhance the DoD's technological capabilities and operational efficiency.
Contract Details and Scope
HII, a prominent global defense and technologies partner, has been awarded a substantial $458 million contract by the U.S. Department of Defense (DoD) 1. The contract, spanning five years, is focused on modernizing the DoD's IT architecture, signaling a major step towards enhancing the department's technological capabilities 2.
HII's Role and Responsibilities
Under this contract, HII will play a crucial role in transforming the DoD's IT infrastructure. The company is tasked with providing a wide range of services, including engineering, cybersecurity, and software development 1. These efforts are aimed at modernizing the department's IT systems, potentially leading to improved operational efficiency and enhanced security measures.
Impact on Defense Operations
The modernization of the DoD's IT architecture is expected to have far-reaching implications for defense operations. By upgrading and streamlining IT systems, the DoD aims to improve its ability to process and analyze data, enhance communication capabilities, and strengthen overall cybersecurity posture 2. This initiative aligns with the broader goals of maintaining technological superiority in defense and national security matters.
HII's Expertise and Track Record
HII's selection for this significant contract underscores the company's reputation and expertise in the defense technology sector. With a history of delivering advanced solutions to the U.S. military and government agencies, HII brings valuable experience to this modernization effort 1. The company's proven track record in handling complex defense projects likely played a crucial role in securing this contract.
Broader Implications for Defense Technology
This contract reflects a growing trend in the defense sector towards embracing cutting-edge IT solutions. As cyber threats and digital warfare become increasingly prominent, modernizing IT infrastructure is crucial for maintaining national security 2. The DoD's investment in this area signals a recognition of the critical role that advanced technology plays in modern defense strategies.
Financial and Strategic Significance
For HII, this $458 million contract represents a significant financial boost and a strategic win. It not only strengthens the company's position in the defense technology market but also opens up potential opportunities for future collaborations with the DoD 1. The contract's substantial value and five-year duration provide HII with a stable revenue stream and the opportunity to showcase its capabilities on a large scale.
Challenges and Expectations
While the contract presents a significant opportunity, it also comes with challenges. Modernizing complex IT systems for an organization as large as the DoD is a daunting task that requires careful planning, execution, and coordination 2. HII will need to navigate potential obstacles such as integrating new systems with existing infrastructure, ensuring minimal disruption to ongoing operations, and meeting stringent security requirements.
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