UPS United Parcel Service

United Technologies Corp. warned it will miss its 2016 goal for deliveries of a new jet engine by roughly 25%, the latest setback in one of the most important programs for the conglomerate.

Pratt & Whitney will likely ship about 150 of its newest family of commercial jet engines, known as the "geared turbofan," down from a previous target of 200, Gregory Hayes, CEO of Pratt parent United Technologies, told investors at a conference Friday.

There had been warning signs, especially the announcement from plane-maker Bombardier Inc. earlier this month that it was cutting its own delivery schedule, and blaming that on delays from Pratt.

But Mr. Hayes's announcement was a disappointment to investors in United Technologies, which has staked a decade and $10 billion in research and development on the new family of engines. Shares fell 2.2% to $100.41 after the announcement in midafternoon trading.

"Suffice it to say the airlines aren't happy they're not getting the engines," Mr. Hayes said. "We're not happy we're not delivering."

Pratt & Whitney executives have previously warned the introduction of the new engine will put pressure on its supply chain. Pratt still hopes to deliver 400 of the new engines next year. The company says it will churn out more than 1,000 of the engines by 2020, part of an effort to attack a backlog that now includes some 8,200 engine orders and options.

But problems have bedeviled the ramp-up. A new logistics center in New Hampshire was beset by delays last year. The center is run by United Parcel Service Inc. under contract with Pratt to organize the delivery of the more than 800 parts that make up an engine. The company says  the kinks have been worked out and that it is helping speed up engine production.

Pratt also angered some customers when the first geared turbofans it delivered had a flaw that required airlines to use longer-than-expected cool down times between some flights to avoid engine damage, a problem the company says it has addressed.

On Friday, Mr. Hayes said there are "five parts that are causing us pain this year" because suppliers haven't been able to deliver them in sufficient numbers and quality to keep pace with engine assembly. A particular problem has been the newly designed aluminum-titanium fan blades, he said.

"We've just struggled because of the technology involved in these blades," Mr. Hayes said, adding that he had visited the shop where blades are produced last week. "Today it takes us about 60 days to build the blades through the shop and needs to get to 30 days."

The blade problems aren't an indicator of deeper manufacturing issues, Mr. Hayes said. The blades are mounted to engines at the end of assembly, he noted, and other than delays in getting the parts, Pratt believes it is assembling the engines quickly enough that it will be back on its timetable by the end of 2017.

Write to Ted Mann at ted.mann@wsj.com

(END) Dow Jones Newswires

September 16, 2016 16:35 ET (20:35 GMT)

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