RTX Corp. announced Monday it will lose up to $3.5 billion in profits related to previously disclosed issues with engines made by East Hartford-based Pratt & Whitney.
The disclosure caused RTX’s stock price to dip more than 6% Monday morning.
Virginia-based aerospace and defense company RTX was formerly known as Raytheon Technologies, which formed in 2020, following the merger of Connecticut-based United Technologies Corp. and Raytheon Companies.
Its subsidiaries include Collins Aerospace, Pratt & Whitney and Raytheon.
The profit hit was disclosed during an impromptu conference call Monday morning, which provided investors an update on how a defect impacting hundreds of Pratt & Whitney GTF engines will impact the company’s future profitability.
RTX first disclosed the issue during its second-quarter earnings call in July. RTX said at the time that up to 1,200 GTF engines would have to be removed from their respective fleets over the next nine to 12 months for early inspections after finding a rare condition in powdered metal used to manufacture certain engine parts.
The company’s new fleet management plan for PW1100 GTF engines, which power the A320neo, includes removing between 600 and 700 engines for shop visits between this year and 2026. A majority of the engine removals will occur in 2023 and early 2024, the company said.
The removals and added maintenance schedule will impact the company’s profits over the next several years, the company said. It will take a $3 billion pretax operating-profit charge in the third quarter.
The company’s stock price was down more than 6.5% to $77.81 at 11:10 a.m., following the call.
