RTX stock falls: Shares Plummet 10% Amid Accelerated Inspections

RTX stock falls: Stock of RTX Falls 10% There will be airline checks because of problems with how engines are made. Tuesday, the share price of RTX, which is a big player in the aerospace industry, went down by 10% because of problems with making famous engines. “Accelerated” checks will need to be done on about 200 engines.

On RTX’s results call, it was said that the problem is with the powdered metal used in some engine parts. Luckily, this problem does not affect engines that are currently in use.

Because of the problem, Pratt & Whitney’s parent company, RTX, had to lower its prediction of cash flow for the year by $500 million, to $4.3 billion.

RTX CEO Greg Hayes talked about how expensive it is to find an answer during the earnings call. But he said that the company will pay the airlines for the trouble.

Even though the tourism business is growing, it is harder for airlines to find planes that work because of the engine problem. There is a big backlog in getting planes to different airlines.

Pratt & Whitney thinks that about 1,000 more engines will be taken out of flight fleets because of this problem in the next 9–12 months.

Noah Poponak, an expert at Goldman Sachs, said that the effects might not be fixed until the next year, or even until 2025, if the engine needs to be fixed right away.

RTX stock falls

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Poponak, who has a neutral opinion on RTX and a price target of $102 for the next 12 months, thinks the market’s reaction is right. On Tuesday, the price of RTX stock was $87.10.

Poponak says that these engines have had repair problems in the past, especially when they were in hot places. This is stuff you should think about.

RTX will keep sending engines and parts for planes out to the public to make sure that flights are safe. This comment made people feel better.

Some A320neos will be affected by the problem. These are famous narrow-body planes that compete with the Boeing 737 Max.

Pratt & Whitney and affected companies are working with the FAA to take the proper steps.

Delta Air Lines, a major Airbus customer, is investigating the issue. Airbus is silent. JetBlue Airways is working with Pratt & Whitney to decide what will happen to its fleet, a spokesman said.

General Electric, a competitor that builds engines, rose more than 6% on Tuesday to a five-year high. The company increased its sales and cash flow expectations for next year due to jet engine demand.

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