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UTC expects no further cut in Boeing 737 MAX production in 2019

Stock MarketsOct 22, 2019 09:32AM ET
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© Reuters. United Technologies logo is displayed on a screen at the post where it's stock is traded on the floor of the NYSE in New York

By Ankit Ajmera

(Reuters) - United Technologies (N:UTX) expects Boeing (N:BA) to maintain production of its 737 MAX planes at the current rate for the rest of 2019, Chief Financial Officer Akhil Johri said on Tuesday, allaying fears of a complete halt in production.

His comments come a day after several analysts raised doubts about Boeing's ability to maintain its production rate of 42 jets per month amid fresh uncertainty over the time frame for the 737 MAX's return to service.

"We continue to work on a daily basis with Boeing," Johri told Reuters in an interview after results, adding that UTC will get more clarity on the planemaker's 2020 production plan by January.

UTC, a major Boeing supplier, on Tuesday reported higher-than-expected quarterly profit and revenue, helped by an increase in demand for aircraft spare parts and maintenance services for an older fleet that remains in service in the wake of the MAX grounding.

"Although the MAX has been grounded, the airlines are ensuring that the fleet they have continues to fly... What that means is they have all the parts available for any repairs that might need to be done," Johri said.

UTC's shares rose 2.3% to $141.4 in premarket trading and Boeing gained more than 1.2% to $335 after declining 11% over the last three days.

Johri, however, said talks to partner with Boeing for its proposed new mid-sized jetliner, NMA, had slowed as the jet producer focused on getting the MAX back in the air.

"The talks are still happening with Boeing at the engineering level on the NMA, but the momentum has slowed a little."

UTC reported quarterly adjusted earnings per share of $2.21 and beat analyst average estimate of $2.03. It also raised its 2019 adjusted profit outlook to a range of $8.05 to $8.15 per share, up from prior forecast of between $7.90 and $8.05.

UTC expects no further cut in Boeing 737 MAX production in 2019
 

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