Rolls-Royce raises profit outlook on engine demand

Rolls-Royce raised its full-year profit outlook Thursday, saying strong demand for aircraft engines, its defence business and power systems used in data centres had supported its performance.

The British engine maker said it now expects underlying operating profit of between £4.7 billion and £4.9 billion this year, up from previous guidance of up to £4.2 billion.

Chief executive Tufan Erginbilgic said a strong start to the year had allowed the company to raise its 2026 guidance despite Middle East conflict causing global travel disruption.

Net profit for the first half fell to £1.6 billion from £4.4 billion a year earlier. Rolls-Royce said the decline was due to an accounting effect linked to foreign exchange rate movements.

The company makes engines for Airbus and Boeing aircraft, as well as military use. Its power systems business was supported by demand from artificial intelligence data centres.

Rolls-Royce shares rose 4% after the update, leading London's FTSE 100 index.

British military equipment maker BAE Systems also upgraded its guidance Thursday after first-half profit rose 5% to £1.02 billion. BAE said it ended the period with an order backlog of £84 billion.