RTX warns of profit hit as 600-700 GTF engines to be removed for quality checks

(Reuters) – Aerospace supplier RTX said on Monday 600 to 700 geared turbofan engines (GTF) will have to be removed for quality checks, which will result in a $3 billion to $3.5 billion pre-tax hit to its profit over the next several years.

The quality issue relates to a rare condition in powder metal used to manufacture certain engine parts.

Shares of the company, whose GTF engines power about half of Airbus A320neo fleet of jets, fell 3.6% before the bell.

“The accelerated removals and incremental shop visits will result in higher aircraft on ground,” RTX said in a statement.

The company expects to record about $3 billion in pre-tax charge in the third quarter, after partners’ share of charges.

Pratt & Whitney is also analyzing the impact of the quality issue on other engine models in its fleet, but that impact is expected to be far less, RTX said.