Shares in Rolls-Royce Holdings (LON:RR) have fallen deep into negative territory in today’s session, even as the British engine maker posted a rise in full-year revenue and reaffirmed its free cash flow outlook. The company, however, announced that it was pulling out of a competition to power a new Boeing platform.
As of 08:59 GMT, Rolls-Royce’s share price had given up 4.17 percent to 941.80p. The stock is underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.77 percent lower at 7,052.34 points. The group’s shares have added more than 15 percent to their value over the past year, as compared with about a 2.5-percent dip in the Footsie.
Rolls-Royce posts full-year results
Rolls-Royce announced in a statement today that its organic revenue had climbed eight percent to £15.07 billion last year. The group’s operating profit meanwhile rose from £306 million in 2017 to £616 million last year, while earnings per share came in 10.2 percent higher at 16.0p.
The British engine maker further said that its restructuring remained on track, and reaffirmed its guidance for at least £1 billion of free cash flow by 2020.
“Despite the challenges we faced on Trent 1000 in-service issues, solid progress has been made realising our ambition to make 2018 a breakthrough year, both strategically and financially,” Rolls-Royce’s chief executive Warren East commented in the statement, adding that the company had identified and was “implementing the fixes to improve the health of the Trent 1000 fleet”.
Group pulls out of Boeing competition
Rolls-Royce, however, announced in a separate statement that it had decided to withdraw from the current competition to power Boeing’s proposed middle of the market platform, saying that it was unable to commit to the proposed timetable to ensure that it had “a sufficiently mature product”.