Rolls-Royce Shares Rally as Earnings, Revenue Jump

Rolls-Royce (LON: RR.) shares surged more than 15% on Thursday, hitting news highs following the release of its 2024 full-year results, showcasing a rise in earnings and revenue. 

The engineering giant reported an underlying operating profit of £2.5 billion, with a margin of 13.8%, rising from the £1.6 billion reported the previous year, driven by strategic initiatives and cost efficiencies.

Revenue also saw a notable increase, reaching £17.8 billion, up from £15.4 billion. Free cash flow came in at £2.4 billion, contributing to a net cash balance of £475 million. 

The company announced a dividend of 6.0p per share and a £1 billion share buyback programme for 2025, signalling strong financial health and confidence.

The firm's 2025 guidance projects an underlying operating profit and free cash flow of £2.7 billion to £2.9 billion, achieving its Capital Markets Day mid-term targets two years ahead of schedule. 

Furthermore, Rolls-Royce has upgraded its mid-term targets for 2028, aiming for an underlying operating profit of £3.6 billion to £3.9 billion.

The company highlighted its “significant transformation progress.”

CEO Tufan Erginbilgic stated: “Strong 2024 results build on our progress last year, as we transform Rolls-Royce into a high-performing, competitive, resilient, and growing business.

“All core divisions delivered significantly improved performance, despite a supply chain environment that remains challenging. We are moving with pace and intensity.”