© Reuters. FILE PHOTO: The logo of the company Leidos Holdings Inc is shown on one of the company’s buildings in San Diego, California, U.S., September 17, 2020. REUTERS/Mike Blake
(Reuters) – U.S. defense contractor Leidos Holdings (NYSE:) Inc forecast lower-than-expected 2023 profit as the industry struggles with labor shortages, higher costs and lingering supply chain bottlenecks.
The Reston, Virginia-based company expects 2023 profit between $6.40 and $6.80 per share, below analysts’ estimates of $6.82, according to Refinitiv.
Newly elected U.S. House speaker Kevin McCarthy’s promise to curb defense spending has also raised concerns about the near-term outlook for companies such as Leidos, which derived about 44% of its total revenue from defense contracts in fiscal 2021.
Rivals General Dynamics Corp (NYSE:) and Lockheed Martin Corp (NYSE:) had also forecast annual profit below estimates.
Revenue in Leidos’ defense solutions unit, which makes surveillance technologies and weapons components such as hypersonic hardware, rose to $2.07 billion for the fourth quarter ended Dec. 30, from $2.06 billion last year.
Sales in its civil unit, which makes air traffic control systems for the Federal Aviation Administration, rose to $938 million from $800 million.
Its healthcare technology unit’s revenue rose to $691 million from $630 million.
Fourth-quarter adjusted net income stood at $1.83 per share, ahead of estimates of $1.61 per share.
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