The British engineering group pointed to strong demand across civil aerospace, defense and power systems, with its data center power orders rising more than 50% in the first half.
Rolls-Royce lifted its full-year profit and cash flow guidance after reporting stronger first-half earnings, helped by solid demand across its civil aerospace, defense and power systems businesses. The 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 more than 24% to £11.3 billion. It now expects full-year underlying operating profit of £4.7 billion to £4.9 billion, up from prior guidance of £4 billion to £4.2 billion, and free cash flow of £3.8 billion to £4 billion, versus an earlier range of £3.6 billion to £3.8 billion. Shares rose as much as 6% and were last up 3.6%. The results highlight Rolls-Royce's exposure to two major investment themes shaping markets: higher defense spending and the buildout of AI-driven data centers. Chief Financial Officer Helen McCabe told CNBC that orders in the company's data center power business increased more than 50% in the first half as operators sought backup and on-site power solutions amid grid constraints, while higher defense budgets in the U.K. and across NATO (Western military alliance) were also creating longer-term opportunities.