MTU Aero Confirms Adjusted Guidance After Pratt & Whitney Jet Engines Recall

   By Mauro Orru 
 

MTU Aero Engines backed its adjusted guidance for the year after Pratt & Whitney parent RTX said it would recall hundreds of jet engines for inspection due to suspected contaminated metal in some parts that could lead to cracking.

RTX, previously known as Raytheon Technologies, said Monday that it would remove about 600 to 700 Pratt engines for inspection over the next three years due to the previously disclosed issue related to the powdered metal used to make certain engine parts. MTU supplies key components for Pratt's geared-turbofan engines that power aircraft such as Airbus's A320neo.

Earlier this week, MTU said it was expecting a hit of around EUR1 billion to revenue and reported EBIT after the jet engines recall.

Executives from the German aircraft-engine manufacturer said during a call Wednesday that the group is still targeting revenue between EUR6.1 billion and EUR6.3 billion this year, though the forecast is still subject to adjustments. Adjusted earnings before interest and taxes--a key profitability metric for MTU--should come in slightly higher than EUR800 million.

"The financial burdens arising from the geared turbofan inspection program are undoubtedly present, but they are not likely to be reflected in the adjusted guidance figures," said Chief Executive Lars Wagner.

The company also backed its 2025 outlook, projecting a steady rise in revenue to around EUR8 billion and adjusted EBIT of around EUR1 billion.

"We are working intensively to minimize the inspection program's impact on our customers," Wagner said.

Write to Mauro Orru at [e-mail]; @MauroOrru94

(END) Dow Jones Newswires

September 13, 2023 11:11 ET (15:11 GMT)

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