Shares in RTX Corp (Raytheon Technologies Corp (NYSE:RTX)), the aerospace engineer formerly known as Raytheon, tumbled more than 6% in Monday’s early deals after warning investors that ongoing engine problems will result in a $3 billion charge on its third-quarter financials.
The company said it was still working on a “rare condition” affecting the engines its subsidiary Pratt & Whitney supplies to Airbus, for the A320 aircraft.
The problem relates to power metallurgy used in the manufacturing process.
"We are focused on addressing the challenges arising from the powder metal manufacturing issue," RTX chief executive Greg Hayes said in a statement.
“We will never compromise on the safe operation of our fleet, which is why the Pratt & Whitney team has worked diligently to develop its fleet management plan.
“At the same time, we recognize this is an extremely difficult situation for our customers, and we are proactively taking steps to support and mitigate the operational impact to them."
Neil Mitchill, RTX chief financial officer, added: “The financial charges related to the powder metal manufacturing issue … reflect the impact of this matter and how we expect to support our customers.
“That said, the financial position of RTX remains strong, and we remain well positioned to execute on our strategic priorities."
Accounting for the charge, RTX told investors it now expected to report full-year earnings between $4.95 and $5.05 per share, unchanged, though sales are now expected to be lower at $68 billion due to order delays related to the metal problem.
In New York, RTX was down 6.38% changing hands at $78.15.