Shares in Rolls-Royce Holdings (LON:RR) have posted a drop in London in today’s session, as the British engine maker revealed continued weakness at its Marine division. The update came after the US unveiled charges against former executives at the blue-chip group for their alleged role in a bribery scheme.
As of 13:30 GMT, Rolls-Royce’s share price had lost 1.60 percent to 943.50p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.59 percent lower at 7,485.54 points. The group’s shares have added more than 41 percent to their value in the year-to-date, as compared with a near five-percent rise in the Footsie.
Rolls-Royce updates on trading
Rolls-Royce updated investors on its trading outlook today, noting that the company had made ‘steady progress’ in the second half of the year, staying on track to achieve targets at its Civil Aerospace division, and having seen satisfactory performance at its Defence Aerospace and Power Systems units.
The group’s Marine division, however, continued to struggle, impacted by weak demand for products and services for the off-shore oil and gas market.
“While markets for our Power Systems products continue to improve, we note the ongoing weakness in offshore oil and gas markets for Marine and timing changes to new export orders for Defence Aerospace,” Rolls-Royce’s chief executive Warren East commented in the statement.
Analysts on Rolls-Royce
Barclays hiked its price target on the British engine maker yesterday, while retaining their ‘underweight’ rating on the shares. WebFG News quoted the analysts as saying that management deserved credit for the cost savings they had achieved, while taking issue with the current five-percent free-cash flow yield the stock is trading on, cautioning that the market was using a peak level to calculate the company’s future cash flows as a reference.