Defense contractor L3Harris Technologies LHX has agreed to pay $62 million to settle allegations of deceit over equipment pricing sold to the U.S. military. This comes as the company is involved in modifying a luxury Boeing 747 for the new Air Force One.
What Happened: The Justice Department announced that L3Harris has agreed to settle claims that it misrepresented equipment prices to the U.S. military years ago. The settlement follows the Pentagon’s formal acceptance of a luxury Boeing BA 747 jet from Qatar’s royal family, intended for use as the new Air Force One by President Donald Trump, reported CNBC.
The false-claims accusations against L3Harris arise from pricing proposals the company submitted for several products bought by the government under “sole source, fixed price contracts” from October 2006 to February 2014. The Justice Department claims that L3Harris did not provide accurate, complete, and up-to-date cost or pricing information for these products.
In a statement to CNBC, L3Harris said, “This matter, which dates back to 2006 – 2014, has been resolved without any admission of fault or liability.”
Why It Matters: This settlement comes at a crucial time for L3Harris. The company has recently been named as a key player in President Trump’s $175 billion “Golden Dome” initiative. The company’s shares saw a rise after the announcement of the Golden Dome missile defense system, which will involve the company’s satellites.
This initiative was expected to significantly benefit L3Harris, as highlighted by Goldman Sachs analyst Noah Poponak, who reiterated a Buy rating on L3Harris. “LHX continues to see opportunity for margin expansion and free cash flow growth,” said Poponak. “It also remains focused on cost and productivity improvement programs.”
However, the recent settlement could potentially impact the company’s future involvement in defense projects, especially under the new administration.
Benzinga’s Edge Rankings place L3Harris in the 59th percentile for quality and the 52nd percentile for momentum, reflecting its average performance in both areas. Check the detailed report here.
Over the past month, L3Harris stock surged 10.58%.
Image via Shutterstock
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
