Connecticut’s major manufacturers, including Pratt & Whitney, Hexcel and Acme United, are reporting squeezed profit margins and reduced earnings forecasts due to rising tariffs, even as sales remain relatively steady.
Pratt & Whitney employees working on a GTF (geared turbofan) engine. Contributed Photo | Pratt & Whitney
Connecticut’s manufacturing sector is feeling the sting of rising tariffs, with several of the state’s largest industrial companies reporting squeezed margins and reduced profit forecasts even as sales remain steady.
The impact is likely also rippling through the state’s vast network of smaller suppliers that feed parts and materials into their production lines, threatening to tighten margins across the supply chain.
Almost two-thirds of in-state manufacturers recently surveyed by the Connecticut Business & Industry Association said the Trump administration’s tariff policies are negatively impacting their operations.
Tariffs cut into Pratt & Whitney margins
At East Hartford-based jet-engine maker Pratt & Whitney, third-quarter revenue rose 16% to $8.4 billion, but profit margins narrowed as tariffs took a toll.
Parent company RTX Corp. said tariff costs at Pratt totaled about $90 million during the quarter, with another $90 million hit at its Collins Aerospace subsidiary.
Neil Mitchill
On a call with analysts, RTX Chief Financial Officer Neil Mitchill said both divisions are seeking to have more products certified under the U.S.-Mexico-Canada Agreement to gain preferential tariff treatment.
The 2020 trade pact, which replaced NAFTA, includes tougher “rules of origin” requiring most industrial goods — including aircraft parts — to contain a high percentage of North American content in order to move duty-free across borders.
“The team’s doing a great job making that a smaller number as we move forward,” Mitchill said, referring to the roughly $90 million in tariff costs. He added that “a number of mitigations have been identified.”
Still, he warned tariffs will continue to dent profits in the fourth quarter.
RTX overall reported third-quarter earnings of $1.92 billion, or $1.41 per share, up 30% from a year earlier.
Hexcel trims outlook
Stamford-based Hexcel Corp. said new tariffs are cutting into profits and forcing the aerospace materials maker to lower its full-year earnings guidance.
The supplier to Airbus and Boeing now expects adjusted 2025 earnings of $1.70 to $1.80 per share, down from an earlier range of $1.85 to $2.05. Sales are projected at about $1.88 billion, the low end of previous guidance.
Hexcel reported third-quarter revenue of $456 million, roughly unchanged from a year earlier, while adjusted earnings slipped to $29.8 million, or 37 cents per share, compared to $38.3 million, or 47 cents per share, in the same period last year.
The company cited tariff-related costs and continued inventory reductions on large commercial aircraft programs, particularly the Airbus A350 and Boeing 787.
Its defense and space business grew by double digits.
Acme United feels retail drag
In Shelton, safety and cutting-products maker Acme United Corp. said tariffs and trade uncertainty continue to weigh on its school and office-supply business.
Third-quarter sales rose 2% to $49.1 million, while net income dropped 14% to $1.9 million, or 46 cents per diluted share, partly due to higher tax expenses.
CEO Walter C. Johnsen said tariff-related uncertainty led major retailers to cancel most promotions of Acme’s Westcott cutting tools, though activity is beginning to rebound. U.S. segment sales rose just 1%, offset by stronger international growth — up 13% in Europe and 5% in Canada.
Despite the headwinds, Johnsen said the company remains profitable and expects continued growth in its first-aid product lines.
While many companies are working to adapt through supply-chain adjustments and tariff mitigation, industry leaders warn that prolonged trade barriers could erode competitiveness for a sector that employs tens of thousands of workers across the state.
