With over 300 of the Boeing 737 MAX jets grounded worldwide, United Technologies has seen an increase in demand for its aircraft maintenance parts and services for airlines’ other aircraft and, as a consequence, has raised its full-year sales and profit forecast.
It is one of the first companies to openly signal that it has made gains on the back of the 737 MAX problems, with shares rising as much as 2.7% in morning trade after the announcement. “There is impetus on the airlines and the (maintenance and repair) shops to ensure that the existing fleet is in a ready-to-fly state,” United Technologies Chief Financial Officer Akhil Johri told Reuters news agency, talking about the MAX grounding. “In that environment, the [repair] shops and the airlines are ensuring that they have the parts supply available and that is definitely helping [United Technologies].” United Technologies also announced that sales in its Collins aerospace unit, which makes engine components, landing gear, wheels and brakes, and interior and exterior aircraft lighting, rose approximately by 66% to US$6.58 billion in the second quarter. Johri added that growth in the unit will slow down in the second half of the year as stocking of spare parts by airlines and shops eases with the likelihood of the 737 MAX returning to the skies.
United Technology said it anticipates its acquisition of Rockwell Collins will add an extra US$150 million in sales and 15 cents per share to its profit in 2019. UTC reported earnings per share of US$2.20 for the quarter ended June 30, beating the average analyst estimate of US$2.05, based on IBES data from Refinitiv.
