Rolls-Royce shares reached a new all-time high after the British aerospace giant reported stronger-than-expected earnings for 2024 and announced a series of shareholder-friendly moves, including a dividend reinstatement and a £1 billion share buyback.
Robust Earnings Beat Expectations
The company, known for manufacturing jet engines for commercial aircraft and power systems for ships and submarines, posted operating profit of £2.46 billion—a 57% surge from the previous year and above analyst estimates. This performance signals strong momentum as Rolls-Royce continues its multi-year transformation efforts.
Management credited the company’s operational improvements and robust demand for enabling it to achieve mid-term financial targets ahead of schedule. Looking forward, the firm now expects operating profit to rise to a range of £3.6 billion to £3.9 billion in the coming years.
Dividend Returns After Five Years
In a move welcomed by investors, Rolls-Royce announced a 6 pence per share dividend, marking its first payout in five years. Alongside this, the company confirmed its intention to repurchase £1 billion worth of shares by the end of 2025 as part of its strategy to enhance shareholder value.
Stock Soars to Record Levels
Following these announcements, shares of Rolls-Royce surged as much as 19% during trading in London, reaching an all-time high before settling nearly 18% higher by early afternoon.
CEO’s Transformation Plan Gains Traction
Since taking over in January 2023, CEO Tufan Erginbilgic has driven significant operational changes aimed at strengthening Rolls-Royce’s financial health. His leadership has helped the company pivot from what he once called a “burning platform” toward a more sustainable growth trajectory.
Ongoing Supply Chain Challenges
Despite the upbeat outlook, Rolls-Royce acknowledged ongoing supply chain disruptions, which CFO Helen McCabe said could persist for another 12 to 18 months. She also emphasized that safety remains a top priority for the aviation giant.
Additionally, the company welcomed the UK government’s commitment to increase defense spending, which could provide long-term benefits for the aerospace and defense sector.
As Rolls-Royce continues to execute on its turnaround plan while navigating supply chain headwinds, investors appear optimistic about its trajectory, as reflected in the stock’s record-breaking rally.
