Rolls-Royce stock rises 7% as company swings to pre-tax profit

The British aerospace and defense firm announced a pre-tax profit of £2.43 billion for 2023, a stark contrast to the previous year's £1.50 billion loss.

Revenues surged to £16.49 billion, exceeding analyst expectations.

The company's underlying operating profit, which excludes one-time items, increased to £1.59 billion, and free cash flow reached €1.5 billion.

CEO Tufan Erginbilgiç credited the record 2023 performance to strategic initiatives and adaptability in a challenging market, highlighting confidence in the 2024 outlook and long-term goals.

Rolls-Royce provided a 2024 forecast with an underlying operating profit between £1.7 billion and £2 billion, and similar free cash flow projections.

Crucially, engine flying hours have rebounded to 88% of pre-pandemic levels, marking a 65% improvement from 2022. The company also reported the highest engine orders in over 15 years and progress in key defense projects, including the Aukus submarine program.