Rolls-Royce lifts defence aero profit forecast, trading in line

Reuters

LONDON, Nov 8 (Reuters) - Rolls-Royce revised profitguidance for its defence aerospace and marine business units andsaid the overall business was trading in line with expectations,as the company continues to benefit from strong demand foraircraft engines.

Rolls, the world's second-largest maker of aircraft enginesbehind U.S. group General Electric, said on Friday itcontinued to expect modest growth in full year underlyingrevenue and good growth in underlying profit, with cash flow tobreak even.

The company is expected to post 2013 pretax profit ofbetween 1.36 to 1.89 billion pounds, or on average 1.74 billionpounds ($2.79 billion), according to a Thomson Reuters survey of18 analysts.

It said guidance for its business segments was unchangedexcept in defence aerospace, where it changed its guidance forunderlying profit from broadly flat to modest growth, and inmarine, where it lowered its profit guidance from modest growthto broadly flat.

German engine maker Tognum, which Rolls Royce now fullymanages two years after buying it, continued to trade in linewith expectations, it said.

The update from Rolls on defence aerospace comes amid awider sense of relief among defence sector players such asLockheed Martin and BAE Systems who recentlysaid that long-dreaded budget cuts in the US had hurt salesless-than-expected.

Rolls, which generates about half of its sales from civilaerospace, has seen also its profits jump on the back of surgingdemand for aircraft engines. The world's two largest planemakersexpect the number of passenger jets to double over the next 20years to more than 30,000, worth about $4 trillion.

The company also announced the appointments of ex-ARM chiefexecutive Warren East, and Lee Hsien Yang, the brother ofSingapore's prime minister, as non-executive directors to theboard.

Shares in Rolls Royce, which have risen by 36 percent sincethe start of the year, closed at 1170 pence on Thursday, valuingit at 22 billion pounds.

View Comments (0)