- UK company Rolls-Royce said that its profits could further rise by as much as 25 percent this year
- CEO Tufan Erginbilgic’s transformation plan, which cut costs and improved pricing to drive higher margins, caused the company’s stock to surge more than 200 percent
- The group’s underlying operating profit in 2023 totaled £1.6 billion pounds (US$2 billion), beating analysts’ forecast of £1.4 billion
LONDON, UK: After it more than doubled its profits last year amid higher engine, defense, and power orders under CEO Tufan Erginbilgic, UK company Rolls-Royce said that its profits could further rise by as much as 25 percent this year.
Erginbilgic’s transformation plan, which cut costs and improved pricing to drive higher margins, caused the company’s stock to surge more than 200 percent.
On February 22, Erginbilgic said, “We are creating momentum and a track record of significant delivery.”
The group’s underlying operating profit in 2023 totaled £1.6 billion pounds (US$2 billion), beating analysts’ forecast of £1.4 billion.
Last year, 2023, was “a historic year” for Rolls-Royce, Bernstein analyst George Zhao said.
“The key stock driver is all about making progress towards the 2027 targets. The guide was better than expected across all key metrics,” he added.
Rolls Royce forecasts its underlying operating profit for 2024 to be between £1.7 billion and £2 billion, above predictions of £1.695 billion.
As the company makes equipment that powers ships and submarines and power generation systems, it has benefited from the recovery in travel demand since the COVID-19 pandemic, meaning that aircraft powered by its engines are flying more often.
It competes with U.S. engine maker GE, Airbus’s exclusive supplier on its widebody planes, and makes engines for Boeing’s 787 jets.
Rolls was spending £1 billion on improving those engines, Erginbilgic said in conclusion.
