Skip to main content

United Tech Settles Pentagon Issues

It over-reserved.
  • Author:
  • Publish date:

United Technologies

(UTX) - Get n.a. Report

will pay the Defense Department $238 million to settle allegations it misaccounted for overhead costs when building engines for the government over two decades.

The settlement ends litigation involving United Tech's Pratt & Whitney unit. According to the company, the dispute centered on the allocation of overhead costs between commercial and government programs for work done between 1984 and 2004.

Scroll to Continue

TheStreet Recommends

United Tech said a previously recorded reserve for the settlement exceeds the agreed-to amount by 5 cents a share. The company reaffirmed 2006 earnings guidance of $3.50 to $3.60 a share, however, because it expects restructuring charges will "equal or exceed the difference."

Analysts surveyed by Thomson First Call are expecting the company to earn $3.63 a share this year.

The stock gained 50 cents, or 0.8%, to $61.95 early Tuesday.