Rolls-Royce’s share price plunged more than 20% after the British engine maker issued its fourth profit warning in just over a year.
The company pointed to a sharp drop in the number of corporate jets powered by Rolls-Royce engines in the third quarter, while demand for other corporate jet services also weakened.
Rolls-Royce makes further 400 job cuts at marine operation
Read more
The company now expects profit “headwinds” of £650m next year, more than double the £300m cut to profit identified in July.
The company’s shares plummeted 21% to 527p in early trading.
Rolls-Royce also announced on Thursday a major restructuring programme for next year to reduce fixed costs, streamline senior management and improve decision-making, all aimed at saving up to £200m a year.
Chief executive Warren East, who took over from John Rishton in July, said: “While 2015 remains broadly as expected, the outlook for 2016 is very challenging. The speed and magnitude of change in some of our markets, which have historically performed well, has been significant and shows how sensitive parts of our business are to market conditions in the short-term.”
The engine maker’s fortunes turned after a decade of rising sales, leading to a series of profit warnings from early last year. Annual profits more than halved in July.
The Derby-based group has already announced it is cutting more than 3,000 jobs in its aerospace and marine arms. This includes closing factories in Ansty in Warwickshire, England, and East Kilbride in South Lanarkshire, Scotland.
The company pointed to a sharp drop in the number of corporate jets powered by Rolls-Royce engines in the third quarter, while demand for other corporate jet services also weakened.
Rolls-Royce makes further 400 job cuts at marine operation
Read more
The company now expects profit “headwinds” of £650m next year, more than double the £300m cut to profit identified in July.
The company’s shares plummeted 21% to 527p in early trading.
Rolls-Royce also announced on Thursday a major restructuring programme for next year to reduce fixed costs, streamline senior management and improve decision-making, all aimed at saving up to £200m a year.
Chief executive Warren East, who took over from John Rishton in July, said: “While 2015 remains broadly as expected, the outlook for 2016 is very challenging. The speed and magnitude of change in some of our markets, which have historically performed well, has been significant and shows how sensitive parts of our business are to market conditions in the short-term.”
The engine maker’s fortunes turned after a decade of rising sales, leading to a series of profit warnings from early last year. Annual profits more than halved in July.
The Derby-based group has already announced it is cutting more than 3,000 jobs in its aerospace and marine arms. This includes closing factories in Ansty in Warwickshire, England, and East Kilbride in South Lanarkshire, Scotland.
No comments:
Post a Comment