0001501585-26-000029
SEC filingRevenue grew strongly on higher shipbuilding volumes, but operating margin compressed and cash flow remained negative, reflecting the capital-intensive nature of the business.
Revenue for the first quarter of 2026 was $3.1 billion, up 13.4% from $2.7 billion in the prior year period. The increase was primarily driven by higher volumes across shipbuilding programs, reflecting increased production activity levels on aircraft carrier and submarine contracts.
Net income and diluted earnings per share were flat at $149 million and $3.79, respectively. While revenue increased, the decline in operating income was offset by lower income tax expense and higher non-operating retirement benefit income, resulting in no change in net income.
Net cash used in operating activities was $390 million, compared to $395 million in the prior year period. Free cash flow was negative $464 million, reflecting typical first-quarter working capital build. Capital expenditures increased to $74 million from $67 million, driven by investments to expand shipbuilding capacity. The company continues to focus on efficiently converting operating results into cash for deployment in operating its businesses and maximizing stockholder value.
Total backlog includes both funded and unfunded firm orders. The company expects capital expenditures to increase due to investments to expand shipbuilding capacity. Inflationary pressures on raw materials, components, and supplies are expected to continue, impacting cost growth.