Huntington Ingalls Industries, Inc. HII is set to release first-quarter 2016 results on May 5, before the opening bell. In the preceding quarter, the company had delivered a negative earnings surprise of 2.61%. Let’s see how things are shaping up for this announcement. Why a Likely Positive Surprise?Our proven model shows that Huntington Ingalls is likely to beat estimates this season because it has the right combination of two key ingredients.Zacks ESP: Earnings ESP, which represents the difference between the Most Accurate estimate and the Zacks Consensus Estimate, stands at +0.47%. This is because the Most Accurate estimate is $2.12 while the Zacks Consensus Estimate is pegged lower at $2.11 per share. A favorable Zacks ESP serves as a meaningful indicator of a likely positive surprise.Zacks Rank: Huntington Ingalls currently carries a Zacks Rank #2 (Buy). Note that stocks with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 have a significantly higher chance of beating estimates. Conversely, Sell-rated stocks (Zacks Rank #4 or 5) should never be considered going into an earnings announcement.The combination of Huntington Ingalls’ Zacks Rank #2 and +0.47% ESP makes us reasonably confident of an earnings beat this season.What's Driving the Better-than-Expected Results?The largest military shipbuilder in the U.S., Huntington Ingalls is the prime industrial employer in Virginia. Huntington Ingalls is the sole designer and manufacturer of nuclear powered aircraft carriers in the U.S. Over 70% of the active U.S. Navy fleet consists of Huntington Ingalls ships.The shipbuilding business outlook remains strong given the enacted fiscal 2016 budget and the fiscal 2017 proposal. Huntington Ingalls’ shipbuilding programs that were funded by the enacted 2016 budget comprised the construction of LPD-28 and the 9th National Security Cutter or NSC as well as accelerated development of LX(R) by two years. This will have a positive bearing on the company’s first quarter results.Huntington Ingalls maintains stable liquidity and capital resources to fund its operations. The company’s net cash from operating activities in 2015 increased 15.6% year over year to $828 million. Free cash flow was $640 million in 2015, up 16.2% year over year. On the other hand, Huntington Ingalls’ long-term debt dropped 18.5% to $1,273 million as of Dec 31, 2015, from end 2014.A stable financial position backed by a strong cash generation capacity enables Huntington Ingalls to follow a disciplined capital spending program.The Zacks Consensus Estimate for 2016 is $2.11 a share, reflecting a rise of 48.5% year over year. The Zacks Consensus Estimate for revenues is at $1,591 million, implying growth of 1.3% year over year.Other Defenses ReleasesPentagon’s prime contractor, Lockheed Martin Corp. LMT, reported adjusted first-quarter 2016 earnings of $2.58 per share, surpassing the Zacks Consensus Estimate of $2.51 by 2.8%.Northrop Grumman NOC reported first-quarter 2016 adjusted earnings of $2.77 per share, beating the Zacks Consensus Estimate of $2.47 by 12.1%. Earnings also increased 29.4% from $2.14 per share in the year-ago quarter on higher sales volume.General Dynamics Corporation GD announced first-quarter 2016 earnings from continuing operations of $2.34 per share, comfortably surpassing the Zacks Consensus Estimate and the year-ago figure of $2.14 by 9.3%.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NORTHROP GRUMMN (NOC): Free Stock Analysis Report GENL DYNAMICS (GD): Free Stock Analysis Report LOCKHEED MARTIN (LMT): Free Stock Analysis Report HUNTINGTON INGL (HII): Free Stock Analysis Report To read this article on Zacks.com click here. Zacks Investment Research