UTC Aftermarket.jpg

UTC Notes Aftermarket Boost

Second quarter earnings rose for the conglomerate, which is set to merger with Raytheon Technologies.

United Technologies (UTC) sounded optimistic about its aftermarket prospects during a second-quarter earnings call.

The U.S. conglomerate, which is due to merge with Raytheon Technologies, posted 2% higher aftermarket sales for its Pratt & Whitney engine business and 18% higher organic sales for its Collins segment.

These were offset slightly by higher costs on PW4000 maintenance contracts due to wear issues, but “the aftermarket is doing very well, overall”, noted Carroll Lane, vice-president, investor relations.

Part of the improvement was down to higher maintenance capacity for V2500 engines in the second quarter following engine re-inspection issues encountered by two MRO providers in the first quarter.

Resolution of those issues meant that V2500 overhaul inductions were up 20% from Q1 to Q2, although even on an annualized basis they were up 5%.

Pratt also noted a positive from higher spare engine sales as customers gain confidence that the teething issues of the PW1000G are resolved.

“As customers are getting confidence in the configuration that we have out in the market now, they’re willing to invest in some leads – some spare engines themselves as oppose to requiring us to hold all of the spare engine pools,” said United Technologies chief financial officer Akhil Johri.

Overall, large engine deliveries – which include the V2500, PW1000G, PW2000 and PW4000 – were down in the second quarter to 189 units, although Johri put that down to Q2 2018 being a “catch-up” quarter when it delivered 210 units to make up for a slump in geared turbofan deliveries in the first quarter.

In the first half of 2019 Pratt delivered 362 large commercial engines, versus 334 in the prior-year period.

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