RTX shares tumbled after it disclosed a defect with its Pratt & Whitney engines that power Airbus A320neo jets that will require the accelerated removal from service and inspection of the airplanes.
The Pratt & Whitney parent company said on Tuesday that a rare condition in the powder metal used to manufacture certain engine parts requires an accelerated fleet inspection.
It expects about 1,200 engines will require inspection over the next nine to 12 months, including approximately 200 accelerated removals by mid-September.
The defect does not impact engines currently in production, the company noted.
“The continued safe operation of our fleet will always remain our number one priority,” RTX CEO Greg Hayes said in a statement.
The recall announcement drew focus from RTX’s second quarter earnings, which saw its profit and sales top expectations on accelerating demand in the commercial aerospace sector and strong defence spending during the period.
It reported adjusted earnings per share (EPS) of $1.29 on revenue of $18.3 billion.
Analysts had been expecting EPS of $1.17 on revenue of $17.54 billion, according to Zacks Consensus Estimate.
The company also raised its full-year sales outlook to $73 to $74 billion from $72 to $73 billion and revised its adjusted EPS outlook range to $4.95 to $5.05, up from $4.90 to $5.05.
However, the company lowered its free cash flow expectation by $500 million from $4.8 billion to $4.3 billion due to the Pratt & Whitney engine issue.
RTX stock was down 14.1% at US$83.37 at noon on Tuesday.
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