Rolls-Royce Sees 2018 at Higher Half of Guidance; Swings to 1st Half Pretax Loss

   By Adria Calatayud 
 

Rolls-Royce Holdings PLC (RR.LN) forecast Thursday that cash flow and underlying operating profit for 2018 will be at the higher half of its guidance range, but said that it slid to a pretax loss for the first half.

Pretax loss for the first six months of the year was 1.26 billion pounds ($1.66 billion) compared with a profit of GBP1.44 billion in the year-earlier period, the British aircraft engine maker said. It also swung to a net loss of GBP962 million from a net profit of GBP1.17 billion a year earlier.

Rolls-Royce said it booked an exceptional charge of GBP554 million related to issues with its Trent 1000 engines, which power some Boeing 787 Dreamliners. On an underlying basis, the company swung to a pretax profit of GBP73 million compared with a loss of GBP143 million.

First-half revenue rose 12.5% at GBP7.49 billion from GBP6.66 billion a year earlier, the company said.

Rolls-Royce said its first-half results were ahead of expectations, due to strong growth at its civil aerospace and power systems divisions.

Rolls-Royce now expects underlying pretax profit and cash flow for the full year to be in the upper half of its guided range, it said. The company previously guided for underlying profit of around GBP400 million plus-or-minus GBP100 million and free cash flow of around GBP450 million plus-or-minus GBP100 million.

Write to Adria Calatayud at [e-mail]

(END) Dow Jones Newswires

August 02, 2018 02:50 ET (06:50 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.