Transportation
Rolls-Royce Lifts Guidance as Cost Discipline Helps Earnings
- Company says it’s on track to achieve mid-term targets
- Stock was best UK performer last year, has gained 50% in 2024
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Rolls-Royce Holdings Plc raised its profit guidance and said it will reinstate dividend payments for the first time since the pandemic as the manufacturer of aircraft engines benefits from greater cost discipline and demand for large jet turbines. The stock surged to a record.
The company said it now expects underlying operating profit of £2.1 billion ($2.7 billion) to £2.3 billion and free cash flow of as much as £2.2 billion, according to a statement on Thursday. Rolls-Royce will also reinstate dividend payments for the full year, starting at a 30% payout ratio of underlying net income and lifting that metric to as much as 40% over time.