Rolls-Royce Profit Rises on Demand for New Engines, Repair Work
Feb. 09, 2012
Rolls-Royce Holdings Plc, the world's second-largest aircraft-engine maker, said full-year profit rose in line with estimates, buoyed by a backlog of power plant orders for passenger jets at Boeing Co. and Airbus SAS.
Pretax profit including matured hedging positions increased to 1.16 billion pounds (US$1.8 billion) from 955 million pounds, the London-based company said in a statement today. Analysts predicted profit of 1.13 billion pounds, according to the average of 19 estimates in a Bloomberg survey. Underlying sales added 4 percent to 11.3 billion pounds.
Rolls-Royce's order book swelled to a record 62.2 billion pounds as customers Airbus and Boeing benefited from airlines upgrading to more fuel-efficient models and growth in air travel in emerging markets. Profit also got a boost from a 60 million- pound payment from the UK government for the early cancelation of contracts, including one for the Rolls-Royce powered Harrier jumpjet.
"We continue to benefit from a broad portfolio, a large and growing customer base and access to markets where demand remains strong for our products and services," Chief Executive Officer John Rishton said in the statement. "For 2012 we expect good growth in both underlying revenue and underlying profit with cash flow around breakeven as we continue to invest in future growth."
Boeing started deliveries of its 787 Dreamliner model, for which GE and Rolls supply engines. Rolls-Royce also competes with a joint venture of General Electric and Pratt & Whitney to build engines for the A380, the world's largest passenger aircraft. Rolls-Royce is the only supplier for Airbus's upcoming A350 wide-body aircraft.
Last year, the company incurred a one-time charge to fix a fault on A380 engines after following the disintegration of a Trent 900 engine on a Qantas Airways Ltd. flight.
Rolls-Royce generates the majority of sales from the civil aerospace market, with the remainder spread across its marine, defense and energy businesses.