Pratt & Whitney, a United Technologies Corporation ( “>UTX ) company, has completed assembly work for the first PurePower PW1217G engine to be used for the Mitsubishi Regional Jet (MRJ) aircraft.
The engine is rated at 17,000 pounds of thrust and is the third PurePower PW1000G series engine to complete assembly.
The PW1200G series engine test program will conduct testing of eight engines over the next two years. Entry into commercial service is scheduled for 2014. Mitsubishi Aircraft Corporation has sold MRJ aircraft to All Nippon Airways and Trans States Holdings.
United Technologies has strong market positions in aerospace/defense and global infrastructure with a portfolio that includes: Carrier, Otis, Hamilton Sundstrand, Pratt & Whitney, Sikorsky and Fire & Security. The company invests in game-changing technology across the business, with its Aerospace companies continuing to make progress on their key development programs.
For example, the Pratt GTF core has accumulated more than 260 hours, validating the performance expectations, and Sikorsky’s Canadian Maritime helicopter continues its successful flight testing with first deliveries scheduled for the end of the year.
The company is expected to deliver double-digit earnings growth in FY10, given restructuring savings and an improving end-market environment. Emerging markets continue to do well, with particular strength in India and Brazil.
In addition to restructuring savings, the company is also seeing the benefits of other cost reduction actions in areas such as travel, furloughs and E&D employee attrition. The company’s cost reduction initiatives have led to a year-over-year increase in its consolidated and segment margins and have also expanded earnings.
The company’s most significant actions were at Carrier, related to ongoing portfolio transformation initiatives in overhead cost reduction projects, and at Hamilton Sundstrand, which continued to advance the low-cost sourcing strategy.
The financial performance of the company depends on conditions in the construction and aerospace industries. The company is also highly dependent on the U.S. government’s budgetary allocation for defense.
A reduction in capital spending in the commercial aviation or defense industries could have a significant effect on demand for UTX’s products, which could have an adverse effect on its financial performance or its results of operations. Its business may also be affected by government contracting risks.
The company’s Pratt and Whitney segment supplies aircraft engines for the commercial, military, business jet, and general aviation markets; industrial gas turbines; geo thermal power systems; and space propulsion systems, as well as provides fleet management, maintenance, repair and overhaul services.
United Technologies Corporation provides high technology products and services to the building systems and aerospace industries worldwide. Growth is attributable to acquisitions and the internal development of existing businesses.
Otis, Carrier and UTC Fire & Security (collectively referred to as the commercial businesses) serve customers in the commercial and residential property industries worldwide. Carrier also serves commercial, industrial, transport refrigeration and food service equipment customers.
Pratt & Whitney, Hamilton Sundstrand and Sikorsky (collectively referred to as the aerospace businesses) primarily serve commercial and government customers in both the original equipment and aftermarket parts and services markets of the aerospace industry. Hamilton Sundstrand and Pratt & Whitney also serve customers in certain industrial markets. Honeywell International Inc (HON) is a major competitor.
We currently have a Neutral recommendation on United Technologies Corporation.
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