Leidos Holdings sees 2023 profit below estimates as supply chain woes persist

(Reuters) – U.S. defense contractor Leidos Holdings 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 and Lockheed Martin Corp 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.

(Reporting by Kannaki Deka in Bengaluru; Editing by Devika Syamnath)