Rolls-Royce Shares Surge 20% on Record Q4 Revenue and £1 Billion Buyback Plan

Rolls-Royce Shares Soar on Strong Q4 Results and Optimistic Outlook

Rolls-Royce Holdings plc experienced a significant surge in share prices following the release of its fourth-quarter results and an optimistic outlook for the future. The British aerospace and defense company reported a 16% increase in revenue to £17.8 billion, surpassing analyst predictions of £17.3 billion.

In a move that further bolstered investor confidence, Rolls-Royce announced a £1 billion share buyback program. The company’s financial performance has been particularly impressive, with profit targets achieved two years ahead of schedule. Operating profit saw a substantial increase of 57%, reaching £2.5 billion.

The market responded enthusiastically to these results, with Rolls-Royce’s stock value rising by nearly 20% in morning trading in London. The company’s market valuation now stands at an impressive £64 billion, with shares having increased by 110% over the past year.

Rolls-Royce has also strengthened its market position, increasing its share of engines on widebody commercial aircraft from 32% to 36% by the end of the year. The company has captured more than half of the market for new engine deliveries over the past two years, demonstrating its competitive edge in the aerospace sector.

A major highlight for Rolls-Royce was the signing of a historic £9 billion contract with the UK Ministry of Defence for the design, manufacture, and support of nuclear reactors for the Royal Navy’s submarines. This contract underscores the company’s crucial role in national defense infrastructure.

Looking ahead, Rolls-Royce has upgraded its mid-term targets, projecting operating profit between £3.6 billion and £3.9 billion and free cash flow between £4.2 billion and £4.5 billion by 2028. These ambitious targets reflect the company’s confidence in its growth trajectory.

CEO Tufan Erginbilgic expressed satisfaction with the company’s rapid progress, stating, “We have delivered on our commitments and achieved our financial targets ahead of schedule.” Analysts at UBS noted the strong forward guidance and broad-based strength across all divisions of the business.

It’s worth noting that Rolls-Royce Motor Cars, often associated with the aerospace giant, has been a subsidiary of BMW since 1998 and operates independently from Rolls-Royce Holdings plc.

As Rolls-Royce continues to strengthen its position in the aerospace and defense sectors, investors and industry observers will be keenly watching its performance in the coming years.