Rolls-Royce is on track for nearly £3 billion in profits, managing to withstand tariffs.
Rolls-Royce bullish on £3bn 2025 profit, weathering global tariff challenges
Bloody hell, Rolls-Royce ain't backing down! The engineering powerhouse announced its confidence in hitting a massive £2.7-£2.9 billion in underlying profit in 2025, despite the ongoing tariff chaos. And guess what? They're also aiming for £2.7-£2.9 billion in free cash flow.
In a balls-out statement to the markets, Rolls-Royce detailed unprecedented demand in their aerospace and defense segments, the main reason behind their share price surge over the years.
Large engine hours in Q1 2025 almost doubled pre-pandemic levels, thanks to sky-high travel demands worldwide. Shares in Rolls-Royce had soared more than 90% over the past 12 months, but owing to Donald Trump's "Liberation Day" announcement, it took a massive hit initially, losing billions in value.
However, look at 'em now! Rolls-Royce's stock climbed nearly 3% on Thursday following their update.
CEO, Tufan Erginbilgic, mumbled something about the company's transformation being on track and expanding the earnings and cash potential of the business. He bragged about creating a more resilient and agile Rolls-Royce, better equipped to handle the bullsh*t in the external environment. And from the sound of things, they've had a stellar start to the year.
When it comes to tariffs, Erginbilgic admitted that global increases had caused a "f*cking degree of uncertainty" for the industry. But Rolls-Royce expects to counteract the impact through a diverse range of defensive measures.
These include cost discipline and efficiencies to offset tariff-related cost increases, supply chain adjustments to minimize tariff impacts, and boosting engine durability initiatives to lower lifecycle costs for customers.
In the airplane business, Rolls-Royce is capitalizing on aftermarket growth, with large engine hours at 110% of 2019 levels in early 2025. The defense division is also looking strong, with impressive orders, including delivery of AE 3007N engines for Boeing’s MQ-25 Stingray drone program for the U.S. Navy.
In the nuclear sector, Rolls-Royce is pushing ahead with small modular reactor (SMR) development, having submitted a final tender to Great British Nuclear in April 2025.
Rolls-Royce stands firm on its 2025 guidance, aiming for £2.7-£2.9 billion in underlying operating profit and free cash flow. Analysts project a 12% revenue hike to £17.295 billion and a whopping 61% pre-tax profit growth to £2.033 billion year-over-year.
So there you have it, Rolls-Royce is on track to weather the tariff storm and continue its extraordinary growth trajectory!
- In response to the global tariff challenges, Rolls-Royce plans to expand its earnings and cash potential by adopting an agile approach, enhancing resilience in the face of industry uncertainties.
- Despite a temporary setback due to the tariff-related issues, Rolls-Royce's stock has demonstrated remarkable growth, soaring over 90% in the past 12 months.
- As the demand for transport in various markets continues to surge, Rolls-Royce anticipates a significant increase in their underlying operating profit and free cash flow, aiming for £2.7-£2.9 billion in 2025.
- Technology will play a crucial role in Rolls-Royce's future, particularly in the airplane business, where they are targeting aftermarket growth and the defense division, with impressive orders such as the delivery of AE 3007N engines for the MQ-25 Stingray drone program.
- Accelerating the development of advanced technologies like small modular reactors (SMRs), Rolls-Royce aims to make a significant impact in the nuclear sector, as demonstrated by their recent tender submission to Great British Nuclear in April 2025.
