Rolls-Royce (LSE:RR.) reported first-half 2026 results ahead of market expectations on Thursday and increased its full-year profit guidance after strong performances across its Civil Aerospace, Defence and Power Systems businesses.
The engineering group generated underlying operating profit of £2.53 billion for the six months ended June 30, exceeding the S&P Global Visible Alpha consensus forecast of £2.37 billion. Underlying revenue also surpassed expectations, rising to £11.28 billion compared with analyst estimates of £11 billion.
Broad-Based Growth Drives Higher Profitability
The stronger performance was supported by continued demand for aftermarket services in the Civil Aerospace division, improved profitability in Defence and ongoing expansion within the Power Systems business, particularly in the fast-growing data centre market.
As a result, Rolls-Royce increased its underlying operating margin to 22.5%, up from 19.1% in the same period last year, with all three operating divisions contributing to the improvement.
Company Raises 2026 Guidance
Following the better-than-expected first-half performance, Rolls-Royce lifted its full-year outlook. The company now expects underlying operating profit to be between £4.7 billion and £4.9 billion, compared with its previous guidance of £4.0 billion to £4.2 billion.
Management said the improved outlook reflects stronger long-term service agreement margins in Civil Aerospace, continued earnings growth in the Power Systems division and better aftermarket performance within its Defence business.
Transformation Strategy Continues to Deliver
Chief Executive Tufan Erginbilgic said the company’s transformation programme continues to create “a very different company,” highlighting stronger operational execution across the group and new growth opportunities in defence, data centres and small modular reactors.
Rolls-Royce also announced an interim dividend of 6 pence per share, an increase from the 4.5 pence per share paid during the same period last year.
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