Rolls-Royce Raises 2026 Profit Guidance Following Strong Half-Year Earnings

Rolls-Royce Holdings raised its full-year 2026 underlying operating profit guidance to a range of £4.7 billion to £4.9 billion, up from the previous estimate of £4 billion to £4.2 billion. The upgrade follows a strong first half of the year, where the company reported a 46% increase in underlying operating profit to approximately £2.5 billion and a revenue jump of over 24% to £11.3 billion.

Growth was fueled by a surge in defense spending and the expansion of AI-driven data centers, with orders in the data center power business increasing by more than 50%. The civil aerospace division also saw profits rise 31% to £1.6 billion as airlines recovered from disruptions linked to the Iran war. Additionally, the company raised its free cash flow guidance to as much as £4 billion and announced a September interim dividend of 6p per share.

CEO Tufan Erginbilgiç attributed these results to a three-year transformation strategy focused on cost-cutting, project revitalization, and diversifying the portfolio beyond aerospace. The company's market capitalization now exceeds £115 billion. While the appointment of Chancellor John Healey and Prime Minister Andy Burnham's intent to increase defense spending have supported the sector, the company continues to align its growth with global geopolitical instability.