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UPDATE 1-MTU Aero ups 2017 profit goal on strong spare parts business

Published 2017-10-26, 02:35 a/m
© Reuters.  UPDATE 1-MTU Aero ups 2017 profit goal on strong spare parts business
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* Q3 adj EBIT 129.8 mln eur vs poll avg 124 mln

* Now sees 2017 profit of 600 mln eur vs previous 560 mln

* Sees spare parts sales stronger than expected this year (Adds forecasts for spare parts, comment on GTF deliveries)

BERLIN, Oct 26 (Reuters) - German aircraft engine maker MTU Aero Engines MTXGn.DE increased its profit target for the year thanks to higher spare parts revenues outweighing deliveries of new engines.

The company, whose customers include Airbus AIR.PA , Boeing (NYSE:BA) BA.N and Bombardier BBDb.TO , said on Thursday it now expected adjusted EBIT of 600 million euros for the year, against a previous forecast of 560 million.

It now expects spare parts revenues to rise by around 10 percent, while revenues from commercial engine production will rise by a mid-to-high single-digit percentage.

It had previously forecast high single-digit growth for both businesses.

MTU typically makes higher profit margins on spares and maintenance activities than on delivering new engines.

MTU is a partner on the geared turbofan engine made by Pratt and Whitney, which powers the Airbus A320neo and Bombardier's CSeries aircraft, but which has seen delivery delays.

Pratt parent United Technologies (NYSE:UTX) UTX.N on Tuesday said it had taken a $196 million charge in the third quarter after it held back some shipments of GTF engines and offered spares to airlines, which had been facing problems with engines already in service. expect a further increase in deliveries for the geared turbofan programs in the fourth quarter, with a corresponding impact on our margin for the full year," MTU Aero CEO Reiner Winkler said.

MTU reported adjusted earnings before interest and tax of 129.8 million euros ($153.5 million), against a forecast for 124 million in a Reuters poll. altered its sales target due to exchange rate changes and now predicts revenues of around 5.1 billion euros instead of 5.3 billion.

($1 = 0.8455 euros)

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