Rolls-Royce Raises Military Engines Outlook as Marine Retreats

Rolls-Royce Holdings Plc (RR/), the world’s second-largest maker of commercial jet engines, raised the earnings target for its defense aerospace unit after booking more contracts from the U.S. government.

The subsidiary will see “modest growth” this year rather than “broadly flat” profit, while sales will advance slightly, the London-based company said today. Rolls-Royce revised the profit outlook for its marine unit to no growth from a modest increase.

Rolls-Royce booked $600 million in contracts from the U.S. government since reporting half-year results. The outlook for civil aerospace, the dominant business at Rolls-Royce, remains at “strong” growth in profit on a modest advance in sales.

The segment has secured key orders since July, including with Japan Airlines (9201) Co. Ltd., which agreed to buy 31 Airbus SAS A350 wide-body aircraft that are only powered by Rolls-Royce engines. Deutsche Lufthansa AG (LHA) also committed to buying A350s in the period.

Sales at the group level are still expected to advance modestly the London-based company said. Rolls-Royce shares have advanced 34 percent since the beginning of the year.

To contact the reporter on this story: Robert Wall in London at rwall6@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net

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