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UTC's profits rise as P&W's GTF deliveries surge

A near doubling of Pratt & Whitney's geared turbofan delivery rate and strong demand for aircraft systems helped push United Technologies' 2018 profit up 16% year-over-year to $5.3 billion.

"It’s the culmination of the investments we have been making, especially on the aerospace side," UTC chief executive Gregory Hayes says of the company's 2018 results on 23 January. "Really solid performance. Better than we expected."

"At Pratt, total GTF production continued to ramp up successfully, with nearly doubled GTF production," Hayes says.

UTC's P&W unit delivered 779 large commercial aircraft engines in 2018, up 45% from 537 engines in 2017, the company says. Fourth quarter deliveries did indeed nearly double -- they increased 90% in one year to 247 engines.

P&W generated sales of $19.4 billion in 2018, up 20% year-on-year, though the engine maker's operating profit actually declined about 2% to $1.3 billion.

P&W had a particularly strong fourth quarter, when sales surged 24% to $5.5 billion.

GTF production had been slow to accelerate in recent years amid several GTF issues, including problems that forced Airbus to halt deliveries of GTF-powered A320neos for several months last year.

But Hayes insists P&W is back on track. "Durability continues to improve", he says, citing a GTF reliability rate of nearly 99.9%.

P&W continues to "work through teething problems" and some engines still require retrofits to address reliability issues, he adds.

UTC's newly formed Collins Aerospace Systems unit also performed well in 2018, with its sales jumping 13% year-on-year to $16.6 billion. The unit's operating profit increasing 15% to $2.3 billion.

"The economic environment looks good from our perspective, particularly on the aerospace business," says chief financial officer Akhil Johri.

Last year UTC closed its $30 billion purchase of Rockwell Collins, which it merged into its own systems and electronics unit to form Collins Aerospace.

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