UTC Aerospace Systems (UTAS) aftermarket revenues grew a solid 7% last quarter on the strength of a 17% jump in initial provisioning, keeping the United Technologies (UTC) company on track to beat less-optimistic early-year projections.
"We do expect the commercial aftermarket business to be up mid-single-digit, as opposed to the low-single-digit we were thinking before,” Akhil Johri, UTC CFO, told analysts on a recent earnings call. "So a little more positive on the commercial aftermarket side, largely because of the strength we’ve seen in provisioning in the first half.”
The aftermarket bump will help UTAS offset what executives expect to be a flat year in original equipment sales. UTAS has ended its 777 landing-gear supply agreement, having lost the work to Heroux-Devtek.
Meanwhile, production on several other programs with significant UTAS content, including the International Aero Engines V2500 and Engine Alliance GP7000, is falling, while the ramp-up of newer programs is just getting underway.
UTAS generates about $4.5 billion of its $14.5 billion in annual revenue from its commercial aftermarket work, including about $1.8 billion in repair work.