Pratt & Whitney delivered fewer commercial aircraft engines in the first quarter than in any of the last three quarters, but the company’s profits inched up amid continued strong demand.
The Connecticut-based engine maker delivered 189 large commercial aircraft engines in the first quarter of 2019, up 52% from the same period last year, P&W parent United Technologies reports on 23 April.
But that is still a low compared to the last three quarters of 2018. For instance, P&W delivered 247 large commercial engines in the fourth quarter of 2018.
UTC does not break out deliveries by engine type, but UTC chief financial officer Akhil Johri says P&W shipped twice as many geared turbofans in the first quarter of 2019 than in the first quarter of 2018.
P&W also continues to reduce its per-engine GTF costs, with the figure expected to decline 15% in 2019, roughly the same as in 2018.
“Costs continue to come down and we are on the right trajectory,” says UTC chief executive Greg Hayes during UTC’s first quarter earnings call.
“Negative engine margin peaked last year,” he adds, noting that P&W is not yet close to breaking even on GTF deliveries.
P&W’s GTF engines power new-generation aircraft such as Airbus A320neos and A220s, the Embraer E-Jet E2 and the in-development Mitsubishi MRJ and Irkut MC-21.
P&W also delivered 39 military engines in the first quarter, up 56% year-on-year, and Pratt & Whitney Canada delivered 524 engines, up 4% in one year.
P&W’s first quarter operating profit increased 5% year-on-year to $433 million, while sales jumped 11% to $4.8 billion. Sales of products to commercial OEMs jumped 35% year-on-year, while military sales increased 16%.
But P&W’s commercial aftermarket sales inched up only 1% year-on-year in the first quarter – less than expected.
Johri attributes aftermarket weakness partly to “engine reinspection requirements at two V2500 MRO providers”.
He does not elaborate on those inspections, and P&W did not immediately respond to a request for more information.
Still, UTC expects P&W’s full-year 2019 commercial aftermarket sales will increase in the “mid-single digit” range.
“In the second quarter, we expect available capacity in the overall MRO network to mitigate the impact of these temporary delays,” Johri says.
Source: Cirium Dashboard