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United Tech Falls On New Geared Turbofan Problems; Rival GE Jumps

February 10, 2018 | By | Reply More

United Technology (UTX) shares got clipped late Friday after reports emerged that Airbus (EADSY) is having new problems with the Pratt & Whitney engines made for its best-selling A320neo planes.

X This marks the latest setback for United Tech’s Pratt & Whitney division and its Geared Turbofan (GTF) engines. The unit has been dogged by reports of GTF manufacturing delays and mechanical problems, although one Wall Street analyst said last month that it may transform into a significant profit driver.

In a statement, Pratt & Whitney said it is working with customers to resolve the issue, which affects the knife edge seal in the high pressure compressor aft hub on the engine. “This issue is isolated to a limited subpopulation of engines,” it added.

Shares of United Tech, a component of the Dow Jones industrial average, closed down 1.9% at 125.03 on the stock market today, while the Dow closed up 1.4%. Fellow Dow stock General Electric (GE), which makes the rival Leap engine, climbed 3.4%, though the Leap has run into its own production problems. Airbus slipped 1.7%, and rival Boeing (BA), which has received orders from Airbus customers frustrated with delays, gained 1%.


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Air safety officials in Europe clamped down on flights by planes powered by affected Pratt & Whitney engines, citing “several occurrences of engine in-flight shutdown,” according to the Wall Street Journal. The move will force airlines operating the A320neo with affected engines to ground some of their planes, it added.

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