Rolls-Royce Shares Rise as Profit Jumps 46% and Guidance Raised

Rolls-Royce Holdings (LON: RR.), the aero-engine and power systems group, said underlying operating profit jumped 46% to £2.5bn in the first half of 2026, up from £1.7bn a year earlier, and raised its full-year guidance. Shares rose more than 2% in early trade today.

The stock traded at 1413.2p, up 2.41% from yesterday’s close of 1380p, having opened at 1447.2p and reached 1463p, close to the 52-week high of 1532.6p set on 25 June. The shares sit well above the 52-week low of 990p.

The results, released in a stock exchange announcement this morning, showed underlying revenue up around 25% to £11.28bn from £9.06bn, with margin widening to 22.5% from 19.1%. Management raised full-year 2026 guidance to £4.7bn-£4.9bn underlying operating profit and £3.8bn-£4.0bn free cash flow, and said the improvement had come despite disruption from the conflict in the Middle East, which it continues to monitor. The interim dividend was raised to 6.0p per share from 4.5p, payable in September.

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The margin gains were broad-based rather than confined to one unit: Civil Aerospace margin rose to 25.3% from 24.9%, Defence to 21.0% from 15.4%, and Power Systems to 20.3% from 15.3%. Net cash rose to £2.1bn at the end of June from £1.9bn at the end of 2025, and the company has completed £1.4bn of a planned £2.5bn buyback tranche this year, part of a wider £7bn-£9bn multi-year programme. Moody’s and Fitch upgraded Rolls-Royce’s credit rating during the half, to A3 and A- respectively, while S&P affirmed its BBB+ rating with a positive outlook.

Chief executive Tufan Erginbilgic said: “Our transformation continues to deliver, and we are demonstrating that Rolls-Royce is now a very different company to that of the past.”

The rise extends a recovery that has already made Rolls-Royce one of the best-performing FTSE 100 stocks over the past year, with shares now trading close to their 52-week high. This is the third consecutive margin-led profit beat under Erginbilgic, which leaves the question of how much of the latest guidance raise is already reflected in the price.