Rolls-Royce Holdings’ (LON:RR) share price has fallen deep into the red in London in today’s session as the company cautioned that problems with its Trent 1000 engines will take longer to fix than previously anticipated. The news marks another blow for the blue-chip engine maker which increased the costs for the Trent 1000 issues last months.
As of 09:09 BST, Rolls-Royce’s share price had given up 3.77 percent to 779.26p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.06 percent lower at 7,352.30 points. The group’s shares have given up just over a quarter of their value over the past year, as compared with less than a one-percent fall in the Footsie.
Trent 1000 issues continue
Rolls-Royce announced in a statement this morning that it had taken a proactive decision to accelerate intermediate pressure turbine blade replacement for some Trent 1000 engines which had led to additional engine removals. As a result, the FTSE 100 company now expects the return to single-digit level of Trent 1000 Aircraft On Ground to be delayed until the second quarter of 2020.
“We deeply regret the additional disruption that this will cause our customers and we continue to work closely with them to minimise the impact on their operations,” Rolls-Royce pointed out.
The company, however, reassured investors that its guidance for the cash costs for the problematic engines in 2019 and 2020 remained unchanged from last month.
Analysts on FTSE 100 group
The 17 analysts offering 12-month targets for the Rolls-Royce share price for the Financial Times have a median target of 1,090.00p, with a high estimate of 1,239.00p and a low estimate of 600.00p. As of September 17, the consensus forecast amongst 18 polled investment analysts covering the blue-chip group advises investors to hold their position in the company.