Shares in Rolls-Royce Holdings (LON:RR) have fallen deep into the red in today’s session, as the group confirmed that it would deliver fewer Trent 7000 engines than expected in the last quarter of the year. The confirmation followed a Bloomberg report which suggested that the company’s output was ‘far short’ of the 30 engines promised to Airbus for its new A330neo jet.
As of 13:36 BST, Rolls-Royce’s share price had given up 4.22 percent to 835.20p, having slumped about 13 percent earlier following the Bloomberg report. The stock is underperforming the broader UK market selloff which has seen the benchmark FTSE 100 index give up 1.09 percent to 6,927.78p so far today.
RR to deliver fewer engines
Rolls-Royce confirmed in a statement today that it expected to deliver fewer Trent 7000 engines than originally planned in the last quarter of the year, reflecting early stage production ramp up challenges. The company expects to fall short of its prior engine delivery projection of approximately 550 large engine deliveries for the year, and is now likely to deliver about 500 engines.
“We continue to work very closely with Airbus and our customers on the details of the delivery schedule,” the group said, adding that while the issues were ‘regrettable,’ they were not uncommon in the early stages of a new engine programme.
The delay marks another blow for Rolls-Royce which has been struggling with issues with its Trent 1000 engines.
Analysts on blue-chip group
The 16 analysts offering 12-month price targets for Rolls-Royce for the Financial Times have a median target of 982.50p on the shares, with a high estimate of 1,266.00p and a low estimate of 675.00p. As of October 24, the consensus forecast amongst 20 polled investment analysts covering the blue-chip engine maker advises investors to hold their position in the company.