Rolls-Royce (LON: RR.) shares are up over 7% Monday morning on news that it has been selected to provide the powerplant for the B-52 Stratofortress under the Commercial Engine Replacement Program (CERP) for the United States Air Force.
The B-52 Stratofortress is aircraft described as an American long-range jet-powered strategic bomber.
The news means the American-made Rolls-Royce F-130 engine will power the B-52 for the next 30 years after the Air Force conducted a multi-year competition.
Tom Bell, Chairman & CEO of Rolls-Royce North America, and President of Defence said: “We are proud to join a truly iconic U.S. Air Force program and provide world-class, American-made engines that will power its missions for the next 30 years. The F130 is a proven, efficient, modern engine that is the perfect fit for the B-52.”
A variant of the Rolls-Royce engine selected to power the iconic B-52 is already in service with the United States Air Force globally, powering the C-37 and E-11 BACN aircraft.
Rolls-Royce will build and test the F130 engines at its Indianapolis, Indiana, facility after recently completing a $600 million investment to upgrade the advanced manufacturing campus.
Rolls-Royce said the B-52 CERP win creates demand for 650 engines to be produced at the site and will bring 150 new high-tech, high-skilled jobs for the state of Indiana.
Rolls-Royce shares are currently trading at 142.22p, up 7.3% from Friday's close and 43% in the last three months. On Monday morning, Morgan Stanley raised Rolls-Royce's price target to 134p from 106p with an Equal-Weight rating.
In August, Rolls-Royce's announced an agreement to sell its Bergen Engines liquid fuel and gas engines business to Langley Holdings. In addition, the company also received a boost over the weekend after news emerged that it could gain extra support for its mini nuclear reactors from the UK Government.
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