Austal shares are being smashed

The littoral combat ship USS Fort Worth in the Java Sea in early 2015. Mass Communication Specialist 2nd Class Antonio P. Turretto Ramos/U.S. Navy via Getty Images

Austal has issued a profit warning over its ship building operations in the US.

A short time ago, its shares were down 35% to $1.47.

The company is having problems with its Littoral Combat Ship 6 for the US Navy.

And its 2016 earnings from Austal’s US shipyard are expected to be lower than in 2015. The US shipbuilding EBIT (earnings before interest and taxes) margin are expected to be in the range of 4.5% to 6.5%.

CEO Andrew Bellamy says the Littoral Combat Ship program is maturing more slowly than expected.

“However, we are working hard to manage the risks and expect an improvement across the program,” he says.

Perth-based Austal is a global defence contractor and a designer and manufacturer of defence and commercial ships.

The company says it has an order book of $3 billion with revenue secured to 2020 and posted record earnings inn 2015 of $1.41 billion. Net profit was $53.2 million.

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