Shares of OSI Systems Inc. fell nearly 10 percent on Friday after the company announced that the U.S. Transportation Security Administration canceled a $60 million order for its airport screening machines.

The TSA terminated a Sept. 26 contract for the Hawthorne manufacturer’s carry-on baggage screening equipment for default, the company said. The agency indicated that it will issue a revised solicitation for the systems, made by OSI subsidiary Rapiscan Systems.

OSI’s passenger-screening machines -- called “naked scanners” by critics – had earlier been removed from U.S. airports after the TSA said the company wouldn’t meet a government deadline to obscure the images.

Shares closed down $6.97, or 9.7 percent, to $64.75 on the Nasdaq.