I'm surprised these analysts are so optimistic. I'd run to the...

I'm surprised these analysts are so optimistic. I'd run to the exit on news like this after the rally today and yesterday allowed a get out of jail (well with fleshwounds). By my sums, earnings expectations would now be about $50m EBIT for the USA versus about $65 to $82m EBIT previously allowing for the previous higher margin expectation and lower AUD. Also the LCS is a massive part of their work that is growing in proportion to other work. It sounds to me like they have underquoted, and possibly writedowns will be coming. They also will not be able to accept new work if their shipyard is tied up for an extra 6 months or whatever, if it does come up.

Shorted it - see what happens. I can't help remembering FGE when this bad news comes, not that I would expect it to be anywhere near as bad, but the market often under-reacts to these often tip of the iceberg announcements.

I might be wrong on what the market does with this, and might be wrong that this is a genuine one-off. We will see soon enough.