HII reports $111 million in quarterly charges for Block IV Virginia subs

By Justin Katz / August 6, 2020 at 11:19 AM

Huntington Ingalls Industries executives today announced the company incurred $111 million in additional charges related to Block IV Virginia-class submarines during its most recent quarter, and $16 million of those costs are directly related to the ongoing coronavirus pandemic.

Mike Petters, HII's chief executive, said the charges were "driven by recent cost and schedule performance and updates to assumptions for future program performance and efficiencies."

"Our plan called for cost and schedule improvements as we worked down the learning curve on the Block IV boats in support of a two-boat-per-year cadence," Petters told Wall Street analysts during an earnings call today.

“As we conducted our regular, second-quarter program status reviews, it became clear that the VCS program was particularly impacted by staffing and efficiency challenges as we reprioritized work to align with our customer's priorities at Newport News,” he continued.

The company also reported schedule delays in two Block IV submarines, the Montana (SSN-794) and New Jersey (SSN-796), which are now scheduled for delivery in late 2021 and late 2022, respectively.