UTC Revenues.jpg

UTC Maintains Conservative Aftermarket Outlook

Official growth projections belie strong overall market fundamentals.

United Technologies (UTC) continues to take a conservative approach with its commercial aftermarket-growth projection this year, despite signs of high demand across the board.

"There's been no surprises" so far, UTC President Greg Hayes said at an investor conference Feb. 20. 

UTC's commercial-aftermarket guidance for the year sees Pratt & Whitney posting mid-single-digit organic growth, while Collins Aerospace will be up in the low- to-mid-single digits. Last year, Pratt's full-year commercial service business increased 12%, while UTC's legacy aerospace systems business grew 8%, including a 14% jump in provisioning.

"We've assumed [provisioning is] going to be flat this year, even though OEM deliveries are going to continue to increase," Hayes said. "We're going to continue to be conservative in terms of the aftermarket outlook until we really see a trend that's going to take it one way or the other."

UTC's conservatism comes as the overall aftermarket remains hot. A Canaccord Genuity survey conducted in January found consensus around a full-year increase of 7%, with engine services leading the way, at 9%. Demand for International Aero Engines V2500 overhauls continues to surge, boosting both repair and parts demand for Pratt, which is a partner in the engine program. 

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