Rolls-Royce Holdings Plc, the world’s second-largest aircraft-engine maker, said profit rose in line with estimates, buoyed by a backlog of orders from Boeing Co. and Airbus SAS.
Pretax profit for the full-year 2011, including matured hedging positions, increased to 1.16 billion pounds ($1.8 billion) from 955 million pounds, the London-based company said Thursday. Analysts predicted profit of 1.13 billion pounds, according to the average of 19 estimates in a Bloomberg survey. Underlying sales added 4 percent, to 11.3 billion pounds.
The company, which employs about 4,500 people in Indianapolis, doesn't break out results for U.S. operations. North America CEO James Guyette noted that in 2011 the company expanded its operations in Virginia and Indiana, following a global competition for work within the company.
Rolls-Royce decided last fall to shift production of the banded stator jet-engine component to Indianapolis in 2013. The move will result in the building of a new production line and the hiring an additional 100 people through 2017.
The company recently announced it will spend $50 million to add a second jet-engine test stand in Mississippi, and Guyette said he anticipates additional investments in 2012. “Our investments will help Rolls-Royce fulfill its $96 billion order book in four global markets—civil aerospace, defense aerospace, marine and energy,” Guyette said in a prepared statement.
Rolls-Royce’s order book swelled to a record 62.2 billion pounds as customers Airbus and Boeing benefited from airlines upgrading to more fuel-efficient models and growth in air travel in emerging markets. Profit also got a boost from a 60 million-pound payment from the United Kingdom government for the early cancellation of contracts, including one for the Rolls-Royce-powered Harrier jumpjet.
“We continue to benefit from a broad portfolio, a large and growing customer base and access to markets where demand remains strong for our products and services,” CEO John Rishton said. “For 2012 we expect good growth in both underlying revenue and underlying profit with cash flow around break-even as we continue to invest in future growth.”
Boeing started deliveries of its 787 Dreamliner model, for which GE and Rolls supply engines. Rolls-Royce also competes with a joint venture of General Electric and Pratt & Whitney to build engines for the A380, the world’s largest passenger aircraft. Rolls-Royce is the only supplier for Airbus’s upcoming A350 wide-body aircraft.
Last year, the company incurred a one-time charge to fix a fault on A380 engines following the disintegration of a Trent 900 engine on a Qantas Airways Ltd. flight.
Rolls-Royce generates the majority of sales from the civil aerospace market, with the remainder spread across its marine, defense and energy businesses.