A model of an UltraFan on the Rolls-Royce Holdings Plc stand on day two of the Farnborough International Airshow in Farnborough, UK, on Tuesday, July 23, 2024.
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British aerospace group Rolls-Royce on Thursday posted stronger-than-expected full-year earnings, upgraded its mid-term guidance and declared a £1 billion ($1.27 billion) share buyback.
Rolls-Royce, which manufactures jet engines for commercial aircraft along with power systems for ships and submarines, reported 2024 operating profit of £2.46 billion, beating analyst expectations and reflecting an increase of 57% from the year prior.
The company said robust delivery in 2023 and 2024 had enabled it to raise its targets, with operating profit expected to increase to between £3.6 billion and £3.9 billion over the mid-term.
Rolls-Royce also announced a dividend of 6 pence per share, reinstating the payout after a five-year break, and said a £1 billion share buyback would be completed over the course of 2025.
Shares of Rolls-Royce surged as much as 16% on the news, notching a new 52-week high and hitting the top of the pan-European Stoxx 600 index. The stock price traded up around 15.3% at 9:03 a.m. London time.
“We are two years into a multi-year transformation journey [and] we’ve made significant progress,” Helen McCabe, CFO of Rolls-Royce, told CNBC’s “Squawk Box Europe” on Thursday.
“It’s a culmination of us following through on our promises,” McCabe said, citing the engine-maker’s expanding earnings potential and improving balance sheet.