RTX Corp. (NYSE:RTX) shares are under pressure today after the aerospace and defense company provided an update on the impact of a rare condition in the powder metal used in the production of certain engine parts on its Prat & Whitney GTF fleet. The condition relates to contaminants that can cause micro cracks in the engine parts. The company is also recognizing an associated charge in the third quarter, which is expected to impact its top line as well as bottom line this year.
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Nearly 600 to 700 PW1100 GTF engines that power the A320neo aircraft will be removed between 2023 and 2026. These accelerated removals and shop visits will result in an increased number of aircraft on the ground. The company expects a hit in the range of $3 billion to $3.5 billion to its pre-tax operating profit over the next several years, including a $3 billion pre-tax charge during the third quarter.
For the full year 2023, sales are now anticipated between $67.5 billion and $68.5 billion, alongside adjusted EPS in the range of $4.95 to $5.05. However, RTX has reaffirmed its commitment to returning $33 billion to $35 billion to shareholders through 2025.
Overall, the Street has a consensus price target of $100.92 on RTX, alongside a Moderate Buy consensus rating. Today’s price decline comes on top of a 17.2% drop in RTX shares for the year so far.
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