UTC says Boeing 737 MAX production could remain at current levels

(Reuters) - United Technologies UTX.N believes Boeing will still make 737 MAX planes at its current rate for the rest of 2019, Chief Financial Officer Akhil Johri said on Tuesday, allaying some fears of a complete halt in production.

FILE PHOTO: United Technologies logo is displayed on a screen at the post where it's stock is traded on the floor of the New York Stock Exchange (NYSE) in New York, U.S., September 5, 2017. REUTERS/Brendan McDermid

Billions are at stake for aircraft suppliers of the MAX including UTC as Boeing works on fixes for the beleaguered plane, which will need the final nod from regulators to return to service.

“From our perspective, we expect rates to be the same this year at 42 (737 MAX aircraft per month),” Johri told Reuters in an interview, adding that UTC “continues to work on a daily basis with Boeing” and expects to get more clarity on the planemaker’s 2020 production plan by January.

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.

UTC’s shares rose as much as 2.8% to $142.24.

Boeing gained more than 3% to $341.48, after the jet manufacturer said it was making progress toward getting its 737 MAX aircraft in the air again and has conducted a dry-run certification flight test.

Johri 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.”

Earlier, UTC reported higher-than-expected quarterly profit and revenue, helped by an increase in demand for aircraft spare parts and maintenance services for older planes that remain 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 reported quarterly adjusted earnings per share of $2.21 and beat analyst average estimate of $2.03. The company 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.

Reporting by Ankit Ajmera in Bengaluru; Editing by Arun Koyyur, Bernard Orr