Rolls-Royce share price: Group makes mistakes in markets forecast

on Nov 28, 2016
Updated: Oct 21, 2019
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Rolls-Royce Holdings (LON:RR) has suffered another setback, admitting that parts of its financial forecasts were wrong, The Telegraph has revealed. The blunders came in the engine maker’s capital markets day earlier this month when the company said that its market outlook was ‘mixed’ and unveiled the impact of a new accounting standard on its profits.

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Rolls-Royce share price has slipped lower this morning, having shed 0.60 percent to 662.00p as of 09:23 GMT, slightly outperforming the broader market selloff which has seen the benchmark FTSE 100 index give up 0.93 percent to 6,777.17 points. The group’s shares have gained more than nine percent over the past year, and are up by some 15 percent in the year-to-date.
The Telegraph reported over the weekend that Rolls-Royce had admitted that its financial forecasts of where the market was going for sales of large airliner engines were wrong for 2018 and 2019. While the company’s slide presentation said that revenues in this key category would rise, the engine maker then backtracked and noted that they would in fact be flat. The corrections came two days after the capital markets event, with Rolls-Royce sending an email after the markets closed to notify those who had registered with its investor relations department.

The Telegraph quoted one analyst as commenting that the engine maker’s executives were “so bust trying to manage the numbers, they are forgetting to manage the business”. Another meanwhile noted that the company “seems lost in a fog of numbers, it’s like they don’t know where they are going”.
Rolls-Royce played down the mistakes, arguing that they were not deemed to be price sensitive information, and so the corrections did not require a regulatory announcement.
As of 09:58 GMT, Monday, 28 November, Rolls-Royce Holding PLC share price is 664.50p.

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