Rolls-Royce Raises 2025 Profit Forecast on Aerospace Demand

Rolls-Royce increased its 2025 full-year guidance, citing strong demand for civil aerospace engines and progress in cost-saving programs. The company now expects underlying operating profit to reach between £3.1 billion and £3.2 billion (US$4 billion and US$4.1 billion), up from the previous forecast of up to £2.9 billion. Free cash flow is also projected to rise to as much as £3.1 billion (US$4.03 billion), compared to the earlier target of up to £2.9 billion.

Adjusted operating profit in the civil aerospace division reached £1.19 billion (US$1.55 billion) in the first half of 2025, exceeding analyst expectations of £686 million. The company attributed the growth to higher engine demand and operational efficiencies. Rolls-Royce plans to issue an interim dividend of  £4.5 pence per share (US$0.05) in September.

Despite the upward revision, Rolls-Royce noted that operating profit will be slightly lower in the second half of the year due to increased maintenance costs. A company statement confirmed, “There will be a significant increase in major shop visits for the Trent 1000,” the engine model powering Boeing 787 Dreamliner. Rolls-Royce acknowledged persistent maintenance challenges with the model.

Airlines including British Airways and Virgin Atlantic have experienced operational disruptions due to Trent 1000 reliability issues. British Airways has opted for General Electric's alternative engine for its latest 787 aircraft, marking a shift away from Rolls-Royce.

In response, the manufacturer stated it is on track to deliver durability upgrades for the Trent 1000 and Trent 7000 engines by year-end, with an expected 30% improvement in time-on-wing performance.

CEO Tufan Erginbilgic, who took office in early 2023, has led the company through restructuring efforts that have contributed to a sustained stock rally. Shares rose as much as 12% in London trading following the announcement, reaching record levels. Rolls-Royce shares have gained approximately 74% year to date.

The company reported improved conditions in the aerospace supply chain, particularly in finished parts availability. However, inflationary pressures remain across the product portfolio. Rolls-Royce expects supply chain challenges to persist through 2025 and 2026. “We have been quick to react to the tariffs, where we have fully mitigated the direct impact across the group as we transform Rolls-Royce into a more proactive, agile business,” Erginbilgic stated in an earnings call with analysts. 

Biggest competitor GE Aerospace also reported strong 2Q25 results, with adjusted revenue up 23% to US$10.2 billion and EPS rising 38% to US$1.66, both beating estimates. Commercial Engines & Services led growth with US$7.99 billion in revenue and US$11.7 billion in orders. Free cash flow nearly doubled to US$2.1 billion. CEO H. Lawrence Culp, Jr. credited improved supply chain performance and record engine deals with Qatar Airways and IAG.