Rolls-Royce jumps 4% as it sees boost from both the defense boom and AI data center buildout
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In this article Rolls-Royce on Thursday hiked its full-year profit and cash flow guidance after strong earnings for the first half of the year, with the British engineering group benefiting from robust demand across its civil aerospace, defense and power systems businesses. The FTSE 100 company posted underlying operating profit of £2.5 billion ($3.3 billion) for the first six months of the year, up 46% from a year earlier, while revenue rose over 24% to £11.3 billion. Rolls-Royce said it now expects full-year underlying operating profit of between £4.7 billion and £4.9 billion, up from previous guidance for between £4 billion and £4.2 billion. It sees free cash flow of £3.8 billion to £4 billion, up from between £3.6 billion and £3.8 billion previously. Shares rose as much as 6% and were last trading up 3.6%. The results underscore how Rolls-Royce is becoming a beneficiary of two of the biggest investment trends reshaping global markets: surging defense spending and the rapid expansion of AI-driven data centers. Speaking exclusively to CNBC after the results, Chief Financial Officer Helen McCabe said orders in the company's data center power business grew more than 50% in the first half of the year as operators increasingly sought backup and on-site power solutions amid grid constraints. She also pointed to growing opportunities from higher defense spending, citing...
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