Shares in Austal have rebounded strongly, surging over 15 per cent in morning trade on the ASX, after the company revised its earnings guidance last week. The increase follows a significant drop on Friday when Austal announced it had overstated earnings related to a US Navy contract. Austal designs, constructs, and sustains specialised commercial and defence vessels. The company is known for its high-speed aluminium vessel technology.
The surge makes Austal the top performer on the ASX 200 for the morning. The company had previously revised its earnings before interest and tax (EBIT) guidance to $110 million, a decrease from the record $135 million previously forecast. The correction came after Austal identified an error in its US subsidiary’s accounting for incentives linked to construction milestones.
Austal disclosed to the market on Thursday that its US subsidiary had double-counted US$17.1 million (AU$24 million) of incentives associated with the manufacture of ships for the US Navy in Alabama. The correction addressed the overstatement of revenue and profit recognised in prior periods. Investors reacted positively to the clarification, driving the share price recovery.
