BOSTON, Aug. 1, 2014 /PRNewswire/ -- Shares in L3 Communications Holdings, Inc. ("L3" or the "Company") (NYSE: LLL) declined 12% to its lowest trading price in 2014, on news of accounting misconduct at its Aerospace Systems segment. It was reported that four employees were terminated, and L3 indicated that it will need to adjust its prior financial results due to misconduct and accounting errors. The errors relate to contract cost overruns that were inappropriately deferred and overstatements of net sales relating to a fixed-price maintenance and logistics support contract.
L3 stated that it currently expects to incur an aggregate pre-tax charge of $84 million against operating income and a related reduction in net sales of approximately $43 million. Of these charges $50 million relates to periods prior to 2014, and approximately $34 million relates to the first half of 2014 with approximately $30 million relating to the second quarter of 2014.
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SOURCE Block & Leviton LLP