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Rolls-Royce shares jumped 19.52%, to their highest level since the start of the pandemic, on Wednesday, after the British aerospace and defense company raised its full-year earnings guidance and said it would significantly beat expectations for half-year results.
The company’s shares have taken a hit over the past three years, sometimes entering the “small stock” area for less than one pound, largely due to the impact of the aviation sector on the Corona pandemic, as well as the indirect effects on aircraft orders and the number of hours used for its engines.
Rolls-Royce makes the engines for Airbus and Boeing.
operating profit forecasts
The company said it now expects “underlying operating profit for the full year to be between £1.2 billion ($1.55 billion) and £1.4 billion, up from previous guidance of £800 million to £1 billion, given the impact of significant cost cuts.” .
And the business “transformation” program is in effect earlier than expected. The company said, “The current market consensus is for an underlying operating profit of £934m.”
It added that it “views its core operating profit for the first half, due on August 3, as just over double analyst expectations of £328m.”
8,500 jobs were abolished
The company eliminated about 8,500 jobs during the years 2020 and 2021, as it launched a comprehensive reshuffle of its operations and management structures to improve profitability, after it fell to a loss of £4 billion in the 2020 fiscal year.
In an update Wednesday, the company said it expects semi-annual earnings across its three major divisions – civil aerospace, defense and energy systems.
“The multi-year transformation program has started well with progress already evident on our strong preliminary results and increased guidance for the full year for 2023,” CEO Tufan Ergenbilgic said in a statement.
Despite the challenging external environment, particularly supply chain constraints, we are beginning to see the early impact of our transformation across all of our divisions.
He added, “Achieving better profits and cash generation reflects greater productivity, efficiency, and improved business results.” (Agencies
