Rolls Royce (LON:RR) shares rocketed 11 percent at market open on Wednesday morning, after posting a 25 percent profit rise well ahead of their own expectations.
Pre-tax profit rose to £1.07 billion, a huge jump from the £813 million posted in 2016, with revenue increasing by 6 percent to £15.09 billion.
The company held its dividend steady however, declaring a figure 11.7p per share for the full year.
Chief executive Warren East said Rolls Royce had made “good progress” in 2017, saying that it had “achieved a number of important operational and technological milestones, but were impacted by the increasing cost and challenge of managing significant in-service engine issues.”
The group are expecting operating profit in 2018 to grow to £400 million, give or take a £100 million, well up from £321 million in 2017.
“2018 will be one of significant operational progress,” East continued.
“In Civil Aerospace we will continue to grow our installed widebody fleet and further reduce cash deficits on engine sales.
“At the same time over the next few years we will be continuing to implement solutions for our airline customers to address the in-service engine issues we are currently experiencing, the estimated costs of which are significant but are included in our cash flow, revenue and earnings guidance for 2018 and beyond.
“While Defence faces some challenges due to timing changes on export activity and in contract mix, we continue to have attractive longer term export opportunities.”
The figures are likely to be taken as evidence that the company has got itself back on right track, after issuing a series of profit warnings in the course of 2015.
