Rolls-Royce problem in Trent engines used for Boeing jets spreads

Rolls-Royce has been hit by a problem with a compressor in the Trent 1000 package C engine, similar to one above, that is not lasting as long as expected, grounding planes, forcing inspections and angering airline clients. (Reuters)
Updated 13 June 2018

Rolls-Royce problem in Trent engines used for Boeing jets spreads

LONDON: Britain’s Rolls-Royce said a costly compressor problem that had grounded Boeing planes had now been found in a different type of engine, compounding pressures on a group that is due to cut more than 4,000 jobs this week.
Britain’s best-known engineering company has been hit by a problem with a compressor in the Trent 1000 package C engine that is not lasting as long as expected, grounding planes, forcing inspections and angering airline clients.
The engine powers Boeing’s 787 Dreamliner jet.
On Monday it said it had now found the same issue on a “small number of high life Package B engines,” requiring a one-off inspection of the B fleet and sending its shares down 1 percent.
The news, which will not affect Rolls’ full-year free cash flow target, comes as the group embarks on the latest stage of a major restructuring program under Chief Executive Warren East that is designed to boost profitability.
On Friday the group will host a capital markets day where, according to a person familiar with the situation, it will announce more than 4,000 job cuts, mostly in Britain and affecting support and management roles.
The group, which employs 50,000 people in 50 countries, is also expected to set out how it will make a return on the investment made in recent years and the expected drivers of cash flow beyond its medium-term horizon.
The news about the compressor issue will not help however as Rolls has been fighting to show it has a lid on a problem which has forced airline customers to lease alternative planes to fly in the busy summer holiday period.
The existing package C issue had led to about 30 of the affected aircraft being grounded at any one time for checks. They were flown by airlines including British Airways, Virgin Atlantic and Air New Zealand.
Air New Zealand said earlier this month it would lease two Boeing 777s to cover for 787-9s that are affected by the Rolls engine issue.
Airlines that use the package C engine tend to also take the package B engine. According to Rolls some 380 package C engines are in service while there are 166 package B engines in service.
Rolls said that while this new problem would incur some additional cost, it did not expect it to affect its free cash flow guidance for 2018.
Analysts welcomed the fact the group did not revise the target and noted the comment that the package B issue only affected a “small number” of engines.


Huawei’s third-quarter revenue jumps 27% as smartphone sales surge

Updated 17 October 2019

Huawei’s third-quarter revenue jumps 27% as smartphone sales surge

  • American companies, significantly disrupting its ability to source key parts
  • Huawei was all but banned by the United States in May from doing business with American companies

SHENZHEN, SHANGHAI: Huawei Technologies Co. Ltd’s third-quarter revenue jumped 27%, driven by a surge in shipments of smartphones launched before a trade blacklisting by the United States expected to hammer its business.
Huawei, the world’s biggest maker of telecom network equipment and the No. 2 manufacturer of smartphones, was all but banned by the United States in May from doing business with American companies, significantly disrupting its ability to source key parts.
The company has been granted a reprieve until November, meaning it will lose access to some technology next month. Huawei has so far mainly sold smartphones that were launched before the ban.
Its newest Mate 30 smartphone — which lacks access to a licensed version of Google’s Android operating system — started sales last month.
Huawei in August said the curbs would hurt less than initially feared, but could still push its smartphone unit’s revenue lower by about $10 billion this year.
The tech giant did not break down third-quarter figures but said on Wednesday revenue for the first three quarters of the year grew 24.4% to 610.8 billion yuan.
Revenue in the quarter ended Sept. 30 rose to 165.29 billion yuan ($23.28 billion) according to Reuters calculations based on previous statements from Huawei.
“Huawei’s overseas shipments bounced back quickly in the third quarter although they are yet to return to pre-US ban levels,” said Nicole Peng, vice president for mobility at consultancy Canalys.
“The Q3 result is truly impressive given the tremendous pressure the company is facing. But it is worth noting that strong shipments were driven by devices launched pre-US ban, and the long-term outlook is still dim,” she added.
The company said it has shipped 185 million smartphones so far this year. Based on the company’s previous statements and estimates from market research firm Strategy Analytics, that indicates a 29% surge in third-quarter smartphone shipments.
Still, growth in the third quarter slowed from the 39% increase the company reported in the first quarter. Huawei did not break out figures for the second quarter either, but has said revenue rose 23.2% in the first half of the year.
“Our continued strong performance in Q3 shows our customers’ trust in Huawei, our technology and services, despite the actions and unfounded allegations against us by some national governments,” Huawei spokesman Joe Kelly told Reuters.
The US government alleges Huawei is a national security risk as its equipment could be used by Beijing to spy. Huawei has repeatedly denied its products pose a security threat.
The company, which is now trying to reduce its reliance on foreign technology, said last month that it has started making 5G base stations without US components.
It is also developing its own mobile operating system as the curbs cut its access to Google’s Android operating system, though analysts are skeptical that Huawei’s Harmony system is yet a viable alternative.
Still, promotions and patriotic purchases have driven Huawei’s smartphone sales in China — surging by a nearly a third compared to a record high in the June quarter — helping it more than offset a shipments slump in the global market.