Rolls-Royce raises full-year profit guidance amid strong demand for aircraft engines and defence business.
LONDON: British engine maker Rolls-Royce lifted its full-year profit guidance Thursday, buoyed by strong demand for its aircraft engines, defence business and power systems used in data centres.
It now expects underlying operating profit to reach between £4.7 billion ($6.3 billion) and £4.9 billion this year, up from previous guidance of up to £4.2 billion.
“A strong start to the year enables us to raise our guidance for 2026 despite the conflict in the Middle East” causing global travel disruption, chief executive Tufan Erginbilgic said in an earnings statement.
Net profit for the first half dropped sharply to £1.6 billion from £4.4 billion a year earlier owing to an accounting effect linked to foreign exchange rate movements.
Rolls-Royce builds engines for commercial use by the world’s biggest aircraft manufacturers Airbus and Boeing, as well as for military use, allowing it to benefit from a surge in governments’ defence spending.
The group’s power systems business was boosted thanks to rising demand for AI data centres.
Since Erginbilgic took the helm in 2023, Rolls-Royce has undergone a major turnaround leading to repeated upgrades to its outlook.
“Our transformation continues to deliver, and we are demonstrating that Rolls-Royce is now a very different company to that of the past,” he added in the statement.
Following the update, shares in the group jumped four percent to top London’s top-tier FTSE 100 index.
The latest earnings come as defence contractors benefit from rising military spending by governments responding to growing concerns about security and US President Donald Trump’s reliability as an ally.
British military equipment maker BAE Systems also upgraded its guidance Thursday after its profit increased five percent to £1.02 billion in the first half of the year.
“The global threat picture remains highly volatile and governments are responding with sustained increases in their defence budgets,” said BAE chief executive Charles Woodburn.
The group closed the period with a record order backlog for its fighter jets, missile launchers, nuclear submarines and other products, which reached £84 billion.
Britain on Wednesday announced BAE would receive £5.9 billion to deliver the next generation of nuclear submarines as part of the country’s nuclear deterrent.
