Rolls-Royce shares dipped on Thursday after the company published a trading update showing that a key performance indicator was tracking below expectations. However, the engine manufacturer is on track with its profit targets for the year. Supply chain and delivery constraints Shares of Rolls-Royce Holdings saw a 3.
5% price dip by midday on Thursday due to multiple challenges outlined in a trading update. It's important to note that despite the minor setback, the company is still set to meet its profit and cash-generation targets. The main issue concerns the recovery of engine flying hours, which have increased by 18% yearly to 102% of 2019 levels.
However, the forecast was for 100-110% of pre-pandemic levels, which Rolls-Royce expects to reach by the end of the year. The reduction can be attributed to slower-than-expected deliveries of Airbus aircraft due to global supply chain constraints. Rolls-Royce expected large engine shop visits to be around the 500-550 mark.
However, according to Investing.com , analysts at Morgan Stanley expect the number to be around 450-500. Tufan Erginbilgic, Chief Executive Officer of Rolls-Royce Holdings, said in regards to the trading update: "Our transformation of Rolls-Royce into a high-performing, competitive, resilient, and growing business continues with pace and intensity.
Continued good performance year to date gives us further confidence in the delivery of our 2024 guidance despite a supply chain environment which remains challenging. .