Rolls-Royce Posts Drop In Profit, Lowers Profit Guidance

Rolls-Royce Holdings PLC reported a drop in its 2014 profit and lowered its profit guidance for the year. Rolls-Royce reported a net profit of GBP69 million ($106.1 million) for the year, versus a year-ago profit of GBP1.37 billion. Group underlying profit before tax shrank to 1.6 billion pounds ($2.46 billion). Its revenue declined to GBP13.74 billion from GBP14.64 billion. John Rishton, Chief Executive said, "2014 has been a mixed year during which underlying revenue fell for the first time in a decade, reflecting reduced spending by our defence customers, macroeconomic uncertainty, and falling commodity prices. In response to these headwinds, we are taking decisive action to improve the Group's financial performance and accelerating our focus on the 4Cs: Customer, Concentration, Cost and Cash. This includes a major restructuring programme in our Aerospace Division and continued rationalisation of our Land & Sea Division." Rolls-Royce now expects full-year pretax profit of GBP1.4 billion to GBP1.55 billion, versus GBP1.62 billion in 2014. It projects sales of GBP13.4 billion to GBP14.4 billion.