US Markets
Home›US Markets›Equities›Rolls-Royce lifts profit guidance as defence spending…
Rolls-Royce lifts profit guidance as defence spending commitments grow
The company raised its forecast for underlying operating profit to £4.7bn to £4.9bn, and free cash flow to £3.8bn to £4bn.
Rolls-Royce shares jumped 5.5% on Thursday morning after the company lifted its earnings guidance, citing government commitments to increase investment in defence systems, according to The Guardian Business.
The update increases Rolls-Royce’s forecast for underlying operating profit for the year to £4.7bn to £4.9bn, up from previous guidance of £4bn to £4.2bn, and it also raised its free cash flow forecast to £3.8bn to £4bn from £3.6bn to £3.8bn.
The company said it has benefited from the jump in defence spending since Russia’s full scale invasion of Ukraine in 2022, and noted additional demand for its power generation unit from datacentres used by AI companies.
Rolls-Royce also pointed to stronger revenues in its engines business for civilian passenger jets as long haul flights have recovered after the pandemic, and told shareholders it expects further gains from commitments made at a recent NATO summit, including for Saab GlobalEye and MQ-4C Triton, which both use Rolls-Royce engines.