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P&W Q3 profit rises 15% on aftermarket sales

Pratt & Whitney's third-quarter operating profit rose 15% year-on-year to $471 million on growth in its military and commercial aftermarket as well as due to cost reduction for its geared turbofan (GTF) engine programme and favorable commercial OEM mix.

The engine-maker shipped 825 aircraft engines in the three months ended 31 September, up from 780 in the same period a year ago, says P&W parent company United Technologies (UTC).

Shipments of military powerplants increased year-on-year, while large commercial aircraft engine shipments fell to 165, down from 198 in 2018, UTC says.

P&W's large commercial engines include PW1000G-series geared turbofans, PW2000s, PW4000s and International Aero Engines V2500s, though it does not break out shipments by engine type.

The company has recently been ramping up PW1000G deliveries amid surging production of new narrowbody aircraft, principally the Airbus A320neo family, which is powered by the PW1100G. Other geared turbofan engines equip the A220 and Embraer E-Jet E2.

Military sales surged 15% year on year in the third quarter, due largely to the Lockheed Martin F-35 programme, which uses P&W's F135 engine.

UTC’s total revenues in the quarter were $19.5 billion, up 18% over the prior year, including five percentage points of organic sales growth and 14 points of acquisition benefit, offset by one point of foreign exchange costs. Of that, P&W had $5.3 billion in sales, up 10% the third quarter 2018.

Overall, it was a strong quarter for UTC, chief executive Gregory Hayes says, and included margin expansion across all four business – Otis, Carrier, Pratt & Whitney and Collins Aerospace.

“Looking ahead, our transformational merger with Raytheon Company, which was overwhelmingly approved by both companies’ shareowners this month, positions [the merged] Raytheon Technologies as a premier aerospace and defense systems provider and a leader in high-technology segments,” Hayes adds.

In early October, shareholders of UTC and defence contractor Raytheon approved the companies' planned merger, putting the deal on track to close in the first half of 2020. The agreement, still subject to regulatory approvals, calls for unification of Raytheon and UTC's aerospace companies, Pratt & Whitney and Collins Aerospace.

The combined company would be called Raytheon Technologies and have some $74 billion in annual revenue. As part of the deal, UTC intends to divest non-aerospace businesses Otis and Carrier.

Hayes says UTC retains confidence in the PW1500G powerplant, despite three incidents within a month which negatively affected customer Swiss International Airlines' A220-300 fleet.

After in-flight shutdowns on 25 July and 16 September, a diversion on 15 October prompted Swiss to conduct immediate engine inspections across the A220 fleet – and to briefly halt the type's operation.

“We remain confident in the engine and are working through it,” Hayes says. “There is no safety issue with this engine.”

Responding to the introduction of the new Gulfstream 19-passenger business G700 jet on Monday at the NBAA show in Las Vegas, he says that P&W “did not offer an engine on that but we continue to work with Gulfstream on additional opportunities.”

The G700 is powered by two Rolls-Royce Pearl 700 turbofans that will produce up to 18,200lb (81.2kN) of thrust and have a range of 7,500nm (13,900km). PW800 engines equip the G500 and G600, Gulfstream's most recent developments, both of which are now in production.

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