It's been six weeks since Huntington Ingalls Industries (NYSE: HII) first floated out of drydock and onto the public markets. Unchained from its parent company, the former Northrop Grumman (NYSE: NOC) shipbuilding division made port earlier this week, and delivered its first solo earnings report. Want to know how they did? So do I -- so let's dig in.

Good news first
The good news here is that Huntington grew its profits 8% year over year, earning $0.92 in the first quarter, versus the $0.85 it says it would have earned in last year's Q1 (had it been independent at the time). The bad news is that this was less than analysts had hoped for, and came with declines in sales and operating income.

Everything else?
Three other things grew at Huntington last quarter. Again, good news first: Backlog was up significantly, as Huntington landed several new Navy and Coast Guard contracts. With $17.4 billion in backlog, Huntington already has enough work to keep it busy for nearly three years.

Bad news: The rate at which the company burns cash fulfilling such contracts nearly tripled. Negative free cash flow leapt from last year's $117 million to $364 million cash burned in Q1 2011. Complicating matters, Northrop gave Huntington a parting "gift" when it spun off the company -- $1.8 billion in long-term debt, or $1.7 billion more than was attributable to the division pre-spinoff …

Foolish takeaway
That's great news for Northrop, which finds its balance sheet considerably less leveraged without Huntington than with. It's pretty good news for Lockheed Martin (NYSE: LMT), General Dynamics (NYSE: GD), and BAE, as they get to compete with a hamstrung rival.  As U.S. defense budgets decrease all around, expect the competition for contracts between these mainstays only to intensify.  This could hurt margins throughout the entire industry. But for Huntington Ingalls and its investors? It's like trying to swim with concrete galoshes.

Will Huntington Ingalls ultimately sink or swim? Add the stock to your Watchlist, and follow along.