Raytheon Technologies Corp.’s stock tumbled 15% Tuesday to put it on track for its worst one-day selloff since the terrorist attacks in September 2001, after the company said it needs to remove certain Pratt & Whitney engines from service for inspection. The stock was headed for its biggest one-day percentage decline since Sept. 17, 2001, the first trading session after 9/11, and was the worst performer in the S&P 500 index.
The engine business has determined that a rare contamination in powdered metal used to make certain engine parts will require accelerated fleet inspection, the company said, calling it an issue that “has recently come to light.” While the issue does not affect engines currently being produced, a “significant” portion of the PW1100G-JM engine fleet, which powers the Airbus
A320neo family of narrow-body airliners, will need to be removed and inspected in the next 9 to 12 months, including about 200 accelerated removals due by mid-September. U.S.-listed shares of Airbus
were down 2.9%. “The business is working to minimize operational impacts and support its customers,” Raytheon said. On the company’s earnings call, Chief Executive Greg Hayes said the company understands the issue and has begun to address it. “That said, clearly this will have an impact on Pratt & Whitney and our customers,” he said, according to a FactSet transcript. Chris Calio, chief operating officer, said the issue is that the powdered metal used to produce certain engine parts may reduce the life of those parts. The metal has been used in Pratt’s products for decades, but the company has determined that the contamination was present in rare instances in metal produced from roughly the fourth quarter of 2015 into the third quarter of 2021. Beyond the initial 200 engines to be removed, Pratt …