London, May 1, 2026, 12:27 (BST)
- Rolls-Royce kept its 2026 profit and cash-flow guidance after a strong first quarter.
- The update matters now because Middle East disruption has tested long-haul flying, a key driver of engine-service revenue.
- Investors are also watching whether the Trent 1000 XE can claw back Boeing 787 business from GE Aerospace.
Rolls-Royce Holdings plc kept its 2026 profit and cash-flow targets and said it expected to absorb the current financial hit from Middle East disruption, giving investors a fresh test of the British engine maker’s turnaround story. The company maintained guidance for underlying operating profit of £4.0 billion to £4.2 billion and free cash flow of £3.6 billion to £3.8 billion.
The timing matters because Rolls-Royce earns heavily from servicing engines on long-haul aircraft, with revenue tied in part to how many hours those engines fly. Reuters reported that the company powers Airbus A350 and Boeing 787 widebody jets, and that airlines had faced disruption to global air travel after the Iran war began in late February.
Shares rose 7.6% on Thursday after the guidance update helped lift the FTSE 100, Reuters reported. They eased on Friday, trading at 1,169.40 pence in a Cboe Europe estimate at 07:24 a.m. EDT, down 1.07%, as some of the rally came off.
Chief Executive Tufan Erginbilgic told shareholders Rolls-Royce had made a “strong start” and expected to “fully mitigate” the current financial impact of the disruption. The company said growth in profit and cash flow was still being driven mainly by its own cost, pricing and operating measures. Investegate
Large engine flying hours, or EFH — the time engines spend in service — rose 5% in the first quarter to 115% of 2019 levels. Rolls-Royce said it still expects large EFH at 115% to 120% of 2019 levels for the full year, while Trent XWB engine hours at Middle Eastern airlines had recovered to pre-conflict levels.
There was a cleaner operational message too. Large engine deliveries rose 18% in the quarter, shop visits rose 12%, and the number of aircraft on ground, a measure of planes unable to fly while waiting for work or parts, had fallen to a single-digit level by the end of April, the company said.
The competitive piece is the Trent 1000 XE. Rolls-Royce said on April 29 that LATAM Airlines had selected the upgraded engine for three Boeing 787 Dreamliners; LATAM CEO Roberto Alvo said the deal would support “operational efficiency” as the carrier builds its long-haul network. Rolls-Royce
That order is small, but it lands in a market where GE Aerospace has had the stronger run on 787 engine selections. Aviation Week reported that LATAM had previously chosen GE’s GEnx-1 engines for a 2023 787 order after durability issues with older Trent 1000 engines, and said GE had won major 787 engine deals with Delta Air Lines and United Airlines earlier this year.
Outside civil aerospace, Rolls-Royce said defence had been helped by better aftermarket work and a more than 20% rise in original-equipment deliveries, meaning new equipment rather than service revenue. Power Systems, which sells gas and diesel engines among other products, said power-generation orders were about 50% higher than a year earlier, led by data centres, and its order backlog stood at £7.3 billion at the end of March.
Small modular reactors, or compact nuclear plants intended to be built in repeatable units, also moved into the revenue column. Rolls-Royce said contracts tied to the UK’s Anglesey project and a Czech project with ČEZ had entered execution and would generate revenue and profit this year.
The risk is execution. Hargreaves Lansdown equity analyst Aarin Chiekrie wrote that newer Rolls-Royce engines have required more maintenance than customers wanted, and that failure to fix those issues over time could hit future profits; he also flagged that shareholder returns are not guaranteed, despite a stronger balance sheet and the buyback programme.
For now, the company is leaning on cash. Rolls-Royce said it had completed more than £750 million of the £2.5 billion 2026 tranche of a planned £7 billion to £9 billion share buyback running through 2028, with half-year results due on July 30.
