Rolls-Royce Soars 15% on Stellar Profit Beat and Promising Future Outlook

British aerospace group Rolls-Royce Holdings Plc reported stronger-than-expected earnings on February 27, 2025, following a successful year in 2024. The company announced a £1 billion ($1.27 billion) share buyback and reinstated its dividend after a five-year hiatus, reflecting a significant turnaround in its financial performance.

Rolls-Royce reported an operating profit of £2.46 billion for the year ended 2024, surpassing analyst expectations and marking a 57% increase from 2023. The company attributed this growth to robust deliveries of jet engines and power systems, which allowed it to upgrade its mid-term guidance. Operating profit is now projected to rise to between £3.6 billion and £3.9 billion in the coming years.

In addition to the positive earnings report, Rolls-Royce announced a dividend of 6 pence per share, reinstating payouts to shareholders for the first time since 2019. The company also revealed plans for a £1 billion share buyback program, expected to be completed by the end of 2025. Following the announcements, Rolls-Royce shares surged by 15.3%, reaching a new 52-week high and leading the pan-European Stoxx 600 index.

Helen McCabe, CFO of Rolls-Royce, emphasized the company’s progress during a CNBC interview, stating, “We are two years into a multi-year transformation journey [and] we’ve made significant progress.” She highlighted the company’s improved balance sheet and expanding earnings potential as key factors in their positive outlook.

Overall, Rolls-Royce’s strong financial results and strategic initiatives reflect a significant recovery and growth potential for the company in the aerospace industry.