Leidos Holdings Reports Lower Revenue in Fourth Quarter Due to Government Shutdown Impact
Feb 17 (Reuters) – Defense contractor Leidos Holdings reported fourth-quarter revenue below Wall Street estimates, as the six-week long U.S. government shutdown last year weighed on the firm’s orders.
The shutdown, the longest in the country’s history, ended in November after severely disrupting government operations and weighing on contractors such as Leidos, which provides IT, weapons and other services to federal agencies.
Shares of Leidos, which also supplies air traffic control systems to the Federal Aviation Administration, fell 1.6% in premarket trading.
Last month, defense supplier L3Harris Technologies also flagged a hit from the shutdown, largely in its space systems business.
Leidos’ revenue during the fourth quarter came in at $4.21 billion, down 3.6% from last year, and lower than analysts’ estimates of $4.31 billion, according to data compiled by LSEG.
Results also took a hit from a 9.3% drop in sales in its health and civil segment, which provides electronic health record systems to both the Department of Defense and Veteran Affairs hospitals.
On an adjusted basis, however, the Reston, Virginia-based company’s fourth-quarter profit per share of $2.76 beat expectations of $2.61, helped by a 160-basis point expansion in its adjusted core profit margin and increased cost controls.
Leidos forecast 2026 adjusted profit between $12.05 and $12.45 per share, the midpoint of which is 4 cents lower than analysts’ estimates of $12.29.
(Reporting by Aishwarya Jain in Bengaluru; Editing by Devika Syamnath)
Leidos Holdings, a defense contractor, recently reported lower revenue in the fourth quarter, falling below Wall Street estimates. The impact of the six-week long U.S. government shutdown last year played a significant role in weighing down the firm’s orders. The shutdown, which was the longest in the country’s history, ended in November after causing disruptions in government operations, affecting contractors like Leidos, which provides IT, weapons, and other services to federal agencies.
Shares of Leidos also took a hit, falling 1.6% in premarket trading. The company, known for supplying air traffic control systems to the Federal Aviation Administration, faced challenges due to the shutdown. Similarly, defense supplier L3Harris Technologies also reported a hit from the shutdown, particularly in its space systems business.
During the fourth quarter, Leidos’ revenue came in at $4.21 billion, marking a 3.6% decrease from the previous year and falling short of analysts’ expectations of $4.31 billion. The company’s health and civil segment experienced a 9.3% drop in sales, impacting its provision of electronic health record systems to the Department of Defense and Veteran Affairs hospitals.
Despite the revenue decline, Leidos managed to exceed profit expectations on an adjusted basis. The company’s fourth-quarter profit per share of $2.76 surpassed the anticipated $2.61, driven by a 160-basis point expansion in its adjusted core profit margin and enhanced cost controls. Looking ahead, Leidos forecasted adjusted profit for 2026 between $12.05 and $12.45 per share, slightly below analysts’ estimates of $12.29.
Overall, the impact of the government shutdown on Leidos Holdings highlights the challenges faced by contractors in the defense industry. The company’s ability to navigate through these obstacles and deliver strong financial results demonstrates its resilience and strategic management approach.
