Rolls-Royce profits climbing despite turbulent economy

Aero engine maker Rolls-Royce yesterday said it was on course to deliver strong growth in full year profits, as it shrugged off the turmoil in the financial markets.

The company also performed well in the third quarter, despite the economic uncertainty caused by problems in the eurozone.

Rolls, which is the world’s second-largest maker of aircraft engines behind US group General Electric, revealed that it had continued to make progress since the half year.

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Its performance has been boosted by a continued flow of orders across its businesses.

Rolls, which makes engines for planemakers Airbus and Boeing, last month agreed to sell its share of the International Aero Engines (IAE) consortium to UTC’s Pratt & Whitney, its partner in the venture, for $1.5bn (£941.2m).

IAE produces engines for the Airbus A320 plane family.

The company, which recently acquired half of German engineer Tognum, also said it was forming a joint venture with Pratt to develop the next generation of engines for the mid-sized narrow body market.

This deal is viewed as a positive move by analysts who forecast that 20,000 narrow body planes will be produced in the next 20 years.

Chief executive John Rishton said that the Tognum deal would add significantly to the scale of energy and marine opportunities, while the Pratt agreement was an important new venture for the company.

Mr Rishton added: “We were also delighted to celebrate the entry into service of the first Boeing 787 Dreamliner, operated by ANA and powered by Rolls-Royce.

“The breadth and balance of our portfolio and the strong access we have to parts of the world where demand remains robust has made Rolls-Royce increasingly resilient.

“We continue to focus on fulfilling our record order book and delivering on the promises we have made to our customers.”

The group is set to report its financial results for 2011 on February 9 next year.

Rolls-Royce is expected to post a 2011 pre-tax profit of between £1.04bn and £1.49bn, according to a Thomson Reuters poll of 22 analysts.

Rolls-Royce can trace its roots back to an electrical and mechanical business established by Henry Royce in 1884.

Royce built his first motor car in 1904. In May 1904, he met Charles Rolls, whose company sold quality cars in London.

The two entrepreneurs formed the Rolls-Royce company in March 1906.

At the start of the First World War, in response to the nation’s needs, Mr Royce designed his first aero engine, the Eagle, which provided half of the total horsepower used in the air war by the allies.

The Eagle powered the first direct transatlantic flight, as well as the first flight from England to Australia.