Huntington Ingalls shares surged 12.3% by 12:10 p.m. ET Thursday after the shipbuilder beat earnings projections. Q3 sales grew 11% to $3.5 billion, above expected sales below $3.4 billion, and earnings per share came in at $5.48 versus analysts' forecast of $4.36. Operating profit margin rose two full percentage points to 7%, and earnings grew 49%, while free cash flow reached $429 million versus $16 million a year earlier. The company forecasts roughly $13.7 billion in sales and about $550 million in free cash flow this year. The author notes the stock trades at about 20x expected free cash flow and a P/S of 0.8x, making it one of the cheaper defense stocks.
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