Rolls-Royce Holdings (LON: RR) delivered a confident first-quarter trading update that pushed shares more than 4% higher in early trading this week.
The aerospace and defence giant maintained its ambitious 2026 financial targets, demonstrating operational resilience and proactive mitigation against geopolitical supply chain headwinds tied to the conflict in the Middle East.
Civil Aerospace had a strong start to the year, driven by large engine and business aviation aftermarket performance. Large engine flying hours grew by 5% to 115% of 2019 levels in the three months to 31 March, with the full-year target set at 115% to 120% of 2019 levels.
Defence continued to benefit from improved aftermarket performance and a more than 20% uplift in new equipment sales. Power Systems delivered strong revenue growth driven by high demand for power generation, particularly in data centres.
Rolls-Royce Holdings (LON: RR.) guidance for 2026 of £4.0bn–£4.2bn of underlying operating profit and £3.6bn–£3.8bn of free cash flow remains unchanged. The company has also completed more than £750 million of the £2.5 billion 2026 tranche within its broader £7 billion to £9 billion share buyback programme.
Since the end of the quarter, the group signed contracts to supply the UK with three small modular reactors, expected to generate revenues and profits this year. Significant engine orders were also confirmed in the period, including 40 Trent XWB-97 engines for Atlas Worldwide and a combined 62 Trent engines for Delta Air Lines.
CEO Tufan Erginbilgic said the company had a strong start to the year driven by its transformation programme and pledged to continue expanding earnings, cash, and growth potential across the business.
Germany is also reportedly considering small modular reactors to increase energy independence, a development that could provide a further boost to Rolls-Royce’s SMR division if orders materialise. Half-year results are scheduled for 30 July 2026.
Timothy Mason is a senior reporter at the Foreign Policy Journal, covering current affairs and business news. He studied Economics at the University of Michigan and has worked as a journalist for over seven years.
