) has entered into a $1.1 billion, ten-year agreement with Pratt
& Whitney, a unit of
United Technologies Corp.
), for jet engine components. Alcoa's shares went up following the
news and hit a new 52-week high of $16.25 yesterday.
Per the agreement, Alcoa will supply key parts for Pratt &
Whitney's engines, including the forging for the first ever
aluminum fan blade developed for Pratt & Whitney's PurePower
engines. Alcoa utilized its proprietary alloys and unique
manufacturing procedures to come up with the code on forging an
aluminum fan blade that is lighter and enables better fuel
efficiency. For the PurePower engines, Alcoa is developing a fan
blade forging using its most advanced aluminum-lithium alloy.
According to the deal, Alcoa will provide components for Pratt
& Whitney's PurePower PW1000G, V2500, GP7000 and several other
regional jet and military engines. The PurePower engine will be
used for aircrafts, including the next-generation Airbus (EADSY)
A320neo. The agreement includes United Technologies "One Company"
terms and conditions that provide for a common contracting approach
between both companies, thereby facilitating future collaboration.
Alcoa plans to utilize aluminum and aluminum-lithium from its
Pittsburgh, PA and Lafayette, IN facilities for the front fan
blades, which will be produced using proprietary manufacturing
processes at its Cleveland, OH plant.
As per, Pratt & Whitney, the deal will allow it to make
double-digit improvements in fuel efficiency, noise and
environmental emissions, and the hybrid metallic fan blade will
help in reducing weight and cost. With this deal, Pratt &
Whitney looks forward to increasing the production of its
next-generation engines by employing Alcoa's expertise in
delivering high-quality parts, while meeting cost targets.
Alcoa holds a Zacks Rank #2 (Buy).
Some better-ranked stocks in the mining sector include
). Both carrying a Zacks Rank #2 (Buy).
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