Rolls-Royce Reports Strong H1 Earnings Amid Defense Growth and AI Demand
Rolls-Royce reported a significant increase in first-half underlying operating profit to £2.5 billion, up 46% year-over-year, driven by strong performance across its civil aerospace, defense, and power systems divisions. Revenue rose 24% to £11.3 billion for the six-month period. The company raised full-year guidance, now expecting an underlying operating profit of between £4.7 billion and £4.9 billion compared to a previous range of £4 billion to £4.2 billion. The defense segment delivered 17% organic revenue growth alongside a 57% jump in profits, while the power systems division saw 28% revenue increase with profit up by 72%. This reflects growing demand for Rolls-Royce's engines and small modular reactors from data centers. The company is already securing orders through 2028 as it shifts focus to continuous operation rather than just backup generators. Rolls-Royce also raised its power generation revenue growth target, increasing the annual projection to 25% by 2030 from a prior goal of 20%. The company's stock rose up to 6%, outperforming broader market indices like FTSE 100 and Stoxx 600.
Tickers: $RR.
Topics: AI demand civil aerospace data centers defense power systems