Rolls-Royce lifts defence aero profit forecast, trading in line
LONDON (Reuters) - Rolls-Royce revised profit guidance for its defence aerospace and marine business units and said the overall business was trading in line with expectations, as the company continues to benefit from strong demand for aircraft engines.
Rolls, the world's second-largest maker of aircraft engines behind U.S. group General Electric , said on Friday it continued to expect modest growth in full year underlying revenue and good growth in underlying profit, with cash flow to break even.
The company is expected to post 2013 pretax profit of between 1.36 to 1.89 billion pounds, or on average 1.74 billion pounds ($2.79 billion), according to a Thomson Reuters survey of 18 analysts.
It said guidance for its business segments was unchanged except in defence aerospace, where it changed its guidance for underlying profit from broadly flat to modest growth, and in marine, where it lowered its profit guidance from modest growth to broadly flat.
German engine maker Tognum, which Rolls Royce now fully manages two years after buying it, continued to trade in line with expectations, it said.
The update from Rolls on defence aerospace comes amid a wider sense of relief among defence sector players such as Lockheed Martin and BAE Systems who recently said that long-dreaded budget cuts in the US had hurt sales less-than-expected.
Rolls, which generates about half of its sales from civil aerospace, has seen also its profits jump on the back of surging demand for aircraft engines. The world's two largest plane makers expect the number of passenger jets to double over the next 20 years to more than 30,000, worth about $4 trillion.
The company also announced the appointments of ex-ARM chief executive Warren East, and Lee Hsien Yang, the brother of Singapore's prime minister, as non-executive directors to the board.
Shares in Rolls Royce, which have risen by 36 percent since the start of the year, closed at 1170 pence on Thursday, valuing it at 22 billion pounds.
(Reporting by Brenda Goh; editing by Rhys Jones)
