Thursday 29 September 2016

Rolls Royce cuts profit forecasts for 2015 and 2016

Published 06/07/2015 | 09:12

Rolls-Royce Silver Ghost used by Edward V11
Rolls-Royce Silver Ghost used by Edward V11

British engineering company Rolls-Royce cut its profit forecasts for this year and next, citing continued weakness in oil and gas markets plus lower demand for some of its aero-engine programmes.

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The downgrade, the latest in a series by the company, comes four days after new chief executive Warren East took the helm.

For 2016, Rolls-Royce said lower demand and pricing for its Trent 700 engines, reduced demand for its business jet engines and some weakness in its after-sales business would cut profits by £300m

Shares in Rolls-Royce dropped 7.6pc to 788.8 pence in early trading today.

Analysts at Jefferies said Rolls-Royce's new guidance appeared to forecast 2016 pretax profit of £1bn, 35 pc lower than their current estimate.

Rolls-Royce said 2015 profit would come in between £1.325bn and £1.475bn,  as much as 5pc lower than it had previously guided, due to a further deterioration in energy markets which would affect sales of marine engines.

Reuters

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