East Hartford-based jet engine manufacturer Pratt & Whitney rode the revival of global air travel to higher year-over-year earnings in 2021 but still faces an uphill battle against supply chain disruptions and a slow reopening of the Asia-Pacific market, officials with Pratt’s parent company said Tuesday.
Raytheon Technologies Corp. set Pratt’s fourth-quarter adjusted profits at $162 million, up from $105 million in the corresponding period one year before. On a year-to-year basis, the company’s earnings rose from $426 million to $487 million.
Total sales for the fourth quarter climbed from $4.49 billion to $5.11 billion. For all of 2021, sales totaled $18.15 billion, up from $17.22 billion in 2020.
Officials attributed those gains to an increase in original equipment orders and aftermarket services, all stemming from the gradual recovery in commercial air traffic over the past 12 months. But executives also sounded some cautionary notes, making clear that the industry is not out of the woods yet and will still be dealing with the ups and downs of the COVID-19 pandemic for some time.
In a conference call with analysts, Raytheon Technologies Chairman and CEO Gregory Hayes acknowledged that the broader company, like many large manufacturers, is facing headwinds from labor shortages, especially among skilled welders, and supply chain issues exacerbated by the spread of the omicron variant.
“We’re working with our suppliers to make sure we can get supply back up to demand,” Hayes said. “It’s not going to happen here in the first quarter. We see that we’re going to have a slow Q1 … primarily at Pratt, that will also impact a little bit at Collins [Aerospace].”
Most operations are still running smoothly, Hayes said, noting that, of Raytheon’s roughly 13,000 product suppliers, “there are less than 100 out there that are giving us real concern.”
“But it only takes one to make us miss a shipment,” he continued. “So we’re actively trying to manage this. I think we’re doing a good job, but we will see some impact here in the first quarter from the supply chain.”
Ultimately, Hayes said, a sustained recovery on the aerospace side of Raytheon will hinge on the mass reintroduction of wide-body commercial aircraft flying long routes in and around Asia.
“We have to see China reopening,” he said. “We have to see all of the countries of the Pacific rim start to reopen, which will allow traffic to recover. Your guess is as good as mine with China’s zero COVID policy that they have whether we’ll see that in the second quarter or the third quarter or the fourth quarter. Right now, we’re assuming in the second quarter we’ll start to see it.”
