Rolls-Royce Holdings PLC (LON: RR), on Thursday, reported a 57% annualised growth in its full-year underlying profit. Shares are up nearly 25% today.
What drove strength for Rolls-Royce in 2022?
The British multinational said it generated £652 million ($786 million) of underlying profit in 2022 – well ahead of £478 million that experts had forecast.
Rolls-Royce attributed the full-year strength to demand for international travel that particularly helped its civil aerospace business. In the prior year, that segment was under pressure due to the COVID restrictions.
The London-headquartered firm reiterated its commitment to winning investment grade credit rating again and resuming dividend payments. It, however, refrained from divulging a timeline for that. Versus the start of the year, Rolls-Royce stock is up more than 30% at writing.
Why else is Rolls-Royce stock up today?
Rolls-Royce had £505 million in full-year free cash flow from continuing operations – about £2.0 billion more than 2021. Its revenue climbed just over 20% to £13.52 billion as well.
For the current year, the aerospace and defense company is calling for up to £1.0 billion of operating profit on £600 million to £800 million in free cash flow. In the earnings press release, CEO Tufan Erginbilgic said:
While our performance improved in 2022, we’re capable of much more. Our transformation programme will improve efficiency and commercial outcomes and deliver a sustainable reduction in working capital.
He also confirmed that the transformation programme is moving at pace. Wall Street currently has a consensus “hold” rating on the Roll-Royce stock.
Source: https://invezz.com/news/2023/02/23/rolls-royce-stock-up-on-full-year-profit/