Honeywell International forecast first-quarter adjusted profit below estimates, signaling strong demand in its high-margin aerospace unit was not enough to beat the impact of supply chain disruptions and labor shortages.

Honeywell’s aerospace peers General Electric and Raytheon Technologies have also flagged labor shortages and higher costs.

“The supply chain for mechanical components remains constrained due to skilled labor shortages among Tier 3 and 4 suppliers,” Honeywell’s chief financial officer Gregory Lewis said on post earnings call with analysts.

A shortage of crucial semiconductor chips and higher prices of raw materials have also hit aerospace and defense companies’ ability to manufacture products over the past year, leading to delays in output. —