Rolls sees silver lining to cloud
Engine maker settles investigation into bribery and ends year on a high
London — Shares in Rolls-Royce jumped 6% on Tuesday after the British maker of engines for aircraft and ships settled a long-running bribery probe and said 2016 profit would beat expectations. Rolls has undergone 18 months of cost-cutting and restructuring under CEO Warren East, who was brought in to stabilise the company in the middle of 2015 after a series of profit warnings. Rolls-Royce’s settlement of bribery investigations with British, US and Brazilian authorities helps to remove a cloud that has hung over the company since 2013, even though the penalty was bigger than analysts had expected. The company said on Monday that it would pay £671m to settle the investigations. Shares in Rolls had jumped 6.1% to 706p by 9.51am in London, hitting their highest level for two months. News of the bigger-than-expected settlement was "negative but benign" as the authorities had allowed Rolls to spread payments over five years, said Jefferies analyst Sandy Morris. "This is by no means a gre...
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