Rolls-Royce stock up despite concerns about its Boeing jets
The benefits of job cuts and management changes are offsetting glitches with its Trent 1000 turbines, with shares up as much as 7.3%
London — Rolls-Royce Holdings is riding a wave of optimism as the benefits of job cuts and management changes overshadow investor concerns about glitches with engines that power Boeing’s 787 jet. The stock rose as much as 7.3% on Thursday as CEO Warren East declared his "growing confidence" in an improved earnings outlook, even as the hit from the Trent 1000 turbine that powers the US jet is set to reach £1.3bn. East has eliminated thousands of jobs, re-organised Rolls-Royce to make it more responsive to demand and struck deals to sell fuel-injection and ship-design arms. The company outlined plans in June to cut another 4,600 management and back-office posts to help it reach a £1bn cash-flow target and blunt the impact of the 787 problems, which have forced airlines to ground planes while their engines receive emergency repairs. "The Trent 1000 bad news is outweighed by good progress on the metrics that really matter to the equity story," Jefferies International analyst Sandy Morri...
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