OSI Systems plunges after TSA pulls $60M screening machine order

|About: OSI Systems, Inc. (OSIS)|By:, SA News Editor

OSI Systems (OSIS -7.7%) shares fall after the contractor loses a $60M order for passenger screening machines from the TSA. The order, secured by subsidiary Rapiscan Systems on Sept. 26, was "terminated for default ... TSA further stated it will issue a revised solicitation for the systems in the future."

The company has struggled in the past year, with hundreds of its imaging machines being pulled from airports after the TSA concluded that OSI could not meet a congressional deadline to make images from its so-called "naked scanners" more generic.

Oppenheimer noted, "The failure sounds rather pedestrian but in the context of the recent dispute with the TSA raises serious questions about the day-to-day management of OSI's most important segment."