Rolls-Royce has lifted its full year 2025 guidance after reporting strong results on July 31, 2025. The company’s underlying half year operating profit reaching £1.7bn, up from £1.15bn, with an operating margin of 19.1%, up from 14%.
The company’s underlying profit before tax reached £1.7bn in the first half, up from £1bn a year prior. Revenues jumped from £8.2bn to £9bn.
The strong performance was driven by its civil aerospace segment, which had the largest margin improvement at 24.9%, up from 14% in the first half last year. The company said strong large engine aftermarket performance, contractual margin improvements, and higher spare engine profit had supported the results.
Following the strong results, Rolls-Royce raised its full year underlying operating profit guidance to £3.1-3.2bn, up from £2.7-2.9bn. In addition, the company guided a full year free cash flow of £3-3.1bn, up from £2.7-2.9bn.
Additionally, Rolls-Royce said it expects to “fully offset” the impact of tariffs through “mitigating actions” the company is taking.
“We have seen some improvement in the supply chain, notably the availability of finished parts, helped by our actions, although we continue to see inflationary pressure in product costs,” the company read in a statement.
Rolls-Royce said it will deliver “significant benefit” to its underlying profit and cash flow to the mid-term and beyond with improved commercial terms and lower costs across its widebody and business aviation contracts.
“All our original equipment (OE) contracts have now been successfully renegotiated,” the company read in a statement. “We have also now renegotiated the most significant oneorous aftermarket contracts and expect to largely conclude the remainder through 2025 and 2026.”
During the company's earnings call, Rolls-Royce CEO Tufan Erginbilgic said its Trent 1000 durability programme is “going well”. The company has completed two upgrade programmes for the engine coined ‘bump A' and ‘bump B’. By the end of the year, the company will do its third upgrade programme ‘bump C’.
“Once we do bump C, the Trent 1000 time on wing programme is effectively finished and that will create — by the end of the year — a highly competitive engine,” continued Erginbilgic. He added that the company hit some milestones with the durability programme for the XWB-84 has hit some milestones but it is “not completely done and some time to go”. The company is continuing to invest in the XWB-97 time on wing programme, which will increase the time on wing by 50%, but will not be complete before 2027.
Following the strong results this morning, the company’s shares had jumped over 10%.