Rolls-Royce Holdings PLC Thursday said it would repurchase GBP1
billion ($1.7 billion) of its shares as the European commercial jet
engine maker plans no major acquisitions.
"As no material acquisitions are planned, and reflecting the
strength of our balance sheet, we will return the proceeds of the
Energy sale to our shareholders," Chief Executive John Rishton
said.
Rolls-Royce in May agreed to sell its industrial gas turbine
business to Siemens for GBP785 million in cash. The disposal of the
business should be completed this year, the London-based company
said.
Rolls-Royce's management will brief investors Thursday after an
unusually tumultuous 18-month period that has seen U.K. and U.S.
regulators examine bribery allegations over business in Asia, a
failed effort to buy Finish marine engine business Wärtsilä and a
warning in February that sales would fail to grow for the first
time in a decade. The company's stock has slumped 19% this
year.
Mr. Rishton, now three years in the job, has embarked on a push
to bring profitability on a par with rivals such as General
Electric Co. In addition to selling the subscale industrial gas
turbine business to Siemens, Rolls-Royce has exited some helicopter
engine activities, and is trying to cut costs at the commercial
aircraft engine unit.
The company left unchanged its earnings guidance for this year
and next, which called for sales and profit to be flat this year
and growth to resume in 2015.
Capital outlays will be driven toward 4% underlying sales over
three to five years from 4.9% last year, the company said. The
company is targeting a credit rating of between "A-" and "A+," it
added.
Over the next decade, Rolls-Royce estimates sales of more than
4,000 Trent engines, which power aircraft such as the Boeing Co.
787 and Airbus Group NV A350 long-range jets.
Write to Robert Wall at robert.wall@wsj.com
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