Rolls-Royce earnings: guidance and results
MyStockButler's October 2026 analysis: Rolls-Royce's latest results reported revenue of £11,448 million from £9,490 million and operating income of £2,418 million, while net income fell to £1,613 million from £4,416 million. Watch whether Rolls-Royce delivers its raised financial guidance while expanding Mankato.
What has Rolls-Royce guided for 2026?
On 26 February 2026, management raised its 2028 target for underlying operating profit to £4.9bn–£5.2bn. It also targets free cash flow of £5.0bn–£5.3bn. Underlying profit uses the company’s adjustments to its accounts; operating profit comes before financing costs and tax. For 2026, management expects operating profit of £4.7bn–£4.9bn and free cash flow of £3.8bn–£4.0bn.
Shareholders are promised a £2.5bn buyback and a 30%–40% dividend payout ratio. Those commitments coincide with a £150m–£200m aerospace supply-chain cash impact. Management’s promise is therefore both an engineering test and a financing test.
| Period | Low | High | Given on | |
|---|---|---|---|---|
| Underlying operating profit | Year to Dec 2026 | 4.7 | 4.9 | Jul 30, 2026 |
| Free cash flow | Year to Dec 2026 | 3.8 | 4.0 | Jul 30, 2026 |
| Share buyback | Year to Dec 2026 | 2.5 | 2.5 | Jul 30, 2026 |
| Total shop visits (visits) | Year to Dec 2026 | 1,480 | 1,550 | Jul 30, 2026 |
Has Rolls-Royce kept its past promises?
So far, management has delivered against its operational promises. Its mid-term operating-profit target ended at £2.8 billion. The company later reported about £3.5 billion for 2025, and shareholders approved the larger remuneration policy with 97.99% of votes cast.
What is Rolls-Royce's trend in the last eight reported periods?
Revenue rose to £11,448 million from £9,490 million. Operating income increased to £2,418 million, although gross margin eased from 30.8% to 29.9%. The business therefore earned more operating profit on substantially more sales, but the margin comparison itself did not improve.
| 6 months to Jun 2026 | 6 months to Dec 2025 | 6 months to Jun 2025 | 6 months to Dec 2024 | 6 months to Jun 2024 | 6 months to Dec 2023 | 6 months to Jun 2023 | 6 months to Dec 2022 | |
|---|---|---|---|---|---|---|---|---|
| Revenue | 11,448 | 11,717 | 9,490 | 10,048 | 8,861 | 8,963 | 7,523 | 7,920 |
| Gross margin (calculated) | 29.9% | 27.7% | 30.8% | 21.0% | 23.8% | 21.9% | 22.0% | 21.4% |
| Operating income | 2,418 | 2,394 | 2,074 | 1,260 | 1,646 | 1,147 | 797 | 614 |
| Net income | 1,613 | 1,425 | 4,416 | 1,372 | 1,149 | 1,183 | 1,229 | 421 |
| EPS, diluted | 19.28 | 16.99 | 52.15 | 16.24 | 13.63 | 14.03 | 14.67 | 5.05 |
What should I watch in Rolls-Royce's next release?
By December 2026, the first test is whether Rolls-Royce delivers its raised financial guidance while expanding Mankato. More production should lead to more shipments; otherwise inventory may absorb cash before sales arrive. Management’s November investor meetings may also reveal whether its outlook has changed.