Shares of military shipbuilding company Huntington Ingalls Industries Inc. (NYSE:HII) were trading higher in premarket on Monday after delivering the first two Lionfish small uncrewed undersea vehicles to the U.S. Navy.

This marks a key development in a defense contract that could eventually encompass 200 units and exceed $347 million in total value.

The Lionfish system, derived from HII’s REMUS 300 line, is a customizable underwater drone engineered for adaptable use in a range of defense applications like mine countermeasures, surveillance, electronic warfare and submarine tracking.

It was created through a collaboration with the U.S. Navy and the Defense Innovation Unit, aiming to fast-track the integration of commercially developed autonomous technologies into military missions.

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The Lionfish initiative marks the Navy’s first move from a prototype to full-scale manufacturing within its innovation-focused acquisition strategy. Lionfish remains the sole underwater drone to meet the Navy’s cybersecurity requirements.

“The success and on-time delivery of Lionfish is the product of close collaboration between the government and industry team that will put a critical mine hunting capability in the hands of sailors and marines in an operationally relevant time frame,” said Duane Fotheringham, president of Mission Technologies’ Uncrewed Systems business group.

The REMUS series allows for quick integration of mission-specific payloads and future tech upgrades.

In 2023, HII obtained the manufacturing contract and launched production at its specialized autonomous systems site in Pocasset, Massachusetts.

Since its inception, the REMUS line has been adopted by over 30 nations, including more than a dozen NATO allies. Over 700 units have been sold globally, and over 90% remain operational after more than two decades.

For FY25, Huntington Ingalls sees Mission Technologies’ revenue of $2.9 billion – $3.1 billion and a total revenue of $11.80 billion – $12.20 billion.

Price Action: HII shares traded higher by 7.72% at $199.22 in premarket at last check Monday.

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