Rolls-Royce Shares Jump After Profit Guidance Raised

Rolls-Royce (LON: RR) shares rallied Thursday after the company reported its 2025 H1 results, raising its full-year guidance after posting a 50% jump in first-half underlying operating profit.

The profit increase was driven by strong performance across its Civil Aerospace and Power Systems divisions.

The engineering group now expects full-year 2025 underlying operating profit of £3.1 billion to £3.2 billion, up from a previous forecast of £2.7 billion to £2.9 billion. Free cash flow guidance was also raised to £3.0 billion to £3.1 billion, above the consensus of £2.84 billion.

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Rolls-Royce said it expects a slightly lower operating profit in the second half of 2025 “due to a lower contribution from net contractual margin improvements (H1 2025: £288m), an increased number of OE deliveries and higher MRO investment-related costs in Civil Aerospace.”

RR. shares are up more than 10% in early Thursday trading, surging past the resistance level at around 1,010p per share, as mentioned yesterday.

Underlying operating profit rose to £1.7 billion in the first half, up from £1.1 billion a year earlier, while margins expanded to 19.1% from 14.0%. Free cash flow increased to £1.6 billion.

“We delivered continued strong operational and strategic progress in the first half of 2025,” said CEO Tufan Erginbilgic. “Our actions led to strong first-half year results, despite the challenges of the supply chain and tariffs.”

The company also announced a 4.5p interim dividend and said it had completed £400 million of a planned £1 billion share buyback programme.

Civil Aerospace led the gains with a 24.9% operating margin, while Power Systems benefited from robust data centre demand and higher defence spending.

Rolls-Royce said it remains confident in its mid-term targets for 2028, including £3.6 billion to £3.9 billion in underlying operating profit and £4.2 billion to £4.5 billion in free cash flow.