United Tech says Collins 2020 profit to be hurt mainly due to Boeing’s 737 Max grounding

United Technologies CFO Neil Mitchill believes that operating profits for the Collins Aerospace unit will take a hit of about $550 million to $600 million, citing the grounding of Boeing's 737 Max aircraft. Read more...

A Boeing 777X airplane taxis during its first test flight from the company’s plant in Everett, Washington, U.S. January 25, 2020.

Terray Sylvester | Reuters

United Technologies Chief Financial Officer Neil Mitchill said he expects 2020 operating profit at the U.S. aircraft parts maker’s Collins Aerospace unit, its biggest, to be hurt largely due to the grounding of Boeing’s 737 Max aircraft.

UTC forecast sales at the unit, which makes products such as avionics, cabin seating and lighting, to be hit by about $550 million to $600 million.

About $225 million of the impact to its full-year operating profit is due to a divestiture and lower sales related to a surveillance technology that facilitates tracking of aircraft position during flight, Mitchill told Reuters.

“Rest relates to the 737 Max,” Mitchill said, as UTC temporarily halted production of the aircraft parts earlier this month.

“We expect to be producing (parts for the 737 Max) as we get into the second quarter, although at a significantly reduced rate, than where we were in 2019,” Mitchill said.