Companies just starting to understand effects of government shutdown

Though the longest government shutdown in U.S. history is over, the consequences of the 43-day impasse are only just starting to clarify for companies across the U.S. and beyond.

- BY CHLOÉ MELEY AND ARVELISSE BONILLA RAMOS

PETER TER KULVE, center, is chief executive officer of Magnum Ice Cream Co.

(MICHAEL NAGLE Bloomberg via Getty Images)

Firms with significant exposure to federal spending, government contracts and regulatory approvals are now tallying up the effects on revenue and profit, with warnings ranging from words of caution to guidance cuts.

Clearfield Inc., a manufacturer of fiber-optic and connectivity products for telecommunications and broadband networks, said industrywide fiber supply constraints and delays in the federal Broadband Equity, Access, and Deployment program, a $42.5-billion initiative to expand broadband access, created uncertainty in the community broadband market.

"The government shutdown did affect bookings and our forecast for a soft first quarter into next year," said Chief Executive Cheri Beranek during an earnings call. The company expects the delays and the recent shutdown to pressure investments, both from private and federal funding, that would impact its community broadband market early in the year.

Spectral AI Inc., a company that applies artificial intelligence tools to medical diagnostics, lowered its revenue guidance as it anticipates reduced work on a contract with the Biomedical Advanced Research and Development Authority because of the shutdown.

"The shutdown is always a concern for companies, especially when they're dealing with the FDA for product approvals, or they're dealing with certain government agencies," said BTIG analyst Ryan Zimmerman, referring to the Food and Drug Administration. "When these companies are really dependent on that, it can be problematic for them."