January 28, 2020 / 1:26 PM / 22 days ago

UTC says Collins 2020 profit to be hurt mainly due to MAX grounding

The ticker symbol for United Technologies is displayed on a screen on the floor of the New York Stock Exchange July 20, 2015. REUTERS/Brendan McDermid

(Reuters) - United Technologies Corp (UTX.N) Chief Financial Officer Neil Mitchill said he expects 2020 operating profit at the U.S. aircraft parts maker’s Collins Aerospace unit, its biggest, to be hurt largely due to the grounding of Boeing Co’s (BA.N) 737 MAX aircraft.

UTC forecast adjusted operating profit at the unit, which makes products such as avionics, cabin seating and lighting, to be hit by about $550 million to $600 million.

About $225 million of the impact to its full-year operating profit is due to a divestiture and lower sales related to a surveillance technology that facilitates tracking of aircraft position during flight, Mitchill told Reuters.

“Rest relates to the 737 MAX,” Mitchill said, as UTC temporarily halted production of the aircraft parts earlier this month.

“We expect to be producing (parts for the 737 MAX) as we get into the second quarter, although at a significantly reduced rate, than where we were in 2019,” Mitchill said.

(This story corrects to “adjusted operating profit” from “sales” in paragraph 2.)

Reporting by Ankit Ajmera in Bengaluru; Editing by Shailesh Kuber

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