Rolls-Royce Holdings PLC (RR.LN) on Thursday warned of a further earnings and cash-flow hit on the back of issues in its troubled Trent 1000 engines, as the company expects to book a charge of 1.4 billion pounds ($1.80 billion).
The British aircraft-engine maker said it now expects full-year operating profit and free cash-flow to be toward the lower end of its guidance ranges as a result of higher costs in fixing Trent 1000 engines used on Boeing Co. ’s (BA) 787 Dreamliner planes.
The company estimates in-service cash costs over the Trent 1000 issues will amount to GBP2.4 billion across the 2017-23 period. This includes GBP1.6 billion previously expected, a fresh GBP400 million hit and a further GBP400 million in costs previously included within the company’s normal program contingency, Rolls-Royce said.
Excerpt from WSJ