Austal (ASX:ASB) share price falls on contract delivery

The Austal Limited (ASX: ASB) share price is falling today despite the shipbuilder announcing delivery of a warship to the US Navy.

| More on:
A man looking sheepish grits his teeth and looks to the side

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Austal Limited (ASX: ASB) share price is falling today despite the company announcing delivery of a new littoral combat ship to the United States Navy. During morning trade, the Austal share price reached $3.00, but has since retreated. At the time of writing, its shares are trading lower at $2.90, down 0.3%.

Let's take a look at Austal's market update today.

New ship delivery

Austal advised that it has delivered an independence-class littoral combat ship to the US Navy.

The warship is the 13th of its kind to be built at Austal's US shipyard. In a symbolic move, the vessel was named USS Mobile after the city of Mobile in Alabama where the shipyard is based.

The new combat ship is a high-speed, shallow-draft surface combatant with an aluminium trimaran hull that provides class leading, multi-mission capability. The ship is designed to defeat growing littoral threats and provide access and dominance along coastal waters. In addition, the vessel has operational flexibility to execute surface warfare, mine warfare and anti-submarine warfare missions.

Currently, Austal's US shipyard has four other littoral combat ships at various stages of construction. Under the program, USS Savannah and USS Canberra are being assembled. USS Santa Barbara and USS Augusta are under construction in the module manufacturing facility.

In addition, construction of USS Kingsville and USS Pierre has yet to start but both have been signed off by the US Navy. Another 14 expeditionary fast transport vessels are also under contract, with 12 vessels already delivered. The remaining two ships include one that is being built and the other scheduled for future construction.

What did management say?

Austal CEO David Singleton welcomed the achievement, saying:

What better way to end this challenging year than with the delivery of the future USS Mobile in its namesake city. This ship is a fantastic tribute to the spirit and determination of the people of Austal USA and the City of Mobile.

Our warmest congratulations to the US Navy on the delivery of their latest independence-class littoral combat ship; another great symbol of the success of the United States defence industrial base and a highly capable addition to the fleet.

About the Austal share price

The Austal share price is heading towards recovery from a rolling 6 months. After reaching highs of $3.68 in June, the company's shares are trading almost 22% lower today.

Austal has a market capitalisation of $1.04 billion and a price-to-earnings (P/E) ratio of 11.7.

Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Austal Limited. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Two brokers analysing stocks.
Broker Notes

Morgans names 2 ASX shares to buy and 2 to hold

Let's see what the broker is saying about these shares.

Read more »

Hand holding out coal in front of a coal mine.
Broker Notes

Up 379% in 5 years, are Whitehaven Coal shares now a buy, hold or sell?

Here’s what Macquarie is forecasting for Whitehaven Coal shares into 2026.

Read more »

Woman with gold nuggets on her hand.
Broker Notes

Expert tips further upside for this surging ASX 200 gold stock

How much fuel is left in the tank for this gold mining heavyweight?

Read more »

A male sharemarket analyst sits at his desk looking intently at his laptop with two other monitors next to him showing stock price movements
Share Market News

5 things to watch on the ASX 200 on Tuesday

It looks set to be a tough session for Aussie investors.

Read more »

happy solar panel installers, solar energy
Share Market News

How Wesfarmers shares could benefit from the latest Bunnings product expansion

Bunnings has a growth plan to charge its profit higher.

Read more »

share buyers, investors, happy investors
Opinions

Why it could be a great time to buy AFIC shares

I’m optimistic about the return potential for this investment company.

Read more »

a couple clink champagne glasses on board a private aircraft with gourmet food plates set in front of them. They are wearing designer clothes and looking wealthy.
Opinions

Why I'm aiming for $1 million with ASX shares

I think it makes a lot of sense to invest in stocks to achieve wealth goals.

Read more »

Ten happy friends leaping in the air outdoors.
Share Gainers

Here are the top 10 ASX 200 shares today

Investors started the week off in a good mood today.

Read more »