Rolls-Royce Holdings plc (LON:RR) stock rose on Thursday, outstripping the broader market. The London-based engineering firm saw its shares rise by 0.74 per cent to 883.20 pence apiece as of 13:20 BST, outperforming the benchmark FTSE 100 index, which is currently up 0.19 per cent to 7,004.37 points. The group’s shares have added just under a quarter to their value over the past month, as well as adding just under a third in the year-to-date.
The firm’s share price has benefited from a string of positive news recently, including the announcements of new contracts and cost-cutting efforts. Most recently, Rolls-Royce confirmed it had been selected by regional aircraft manufacturer ATR to supply Trent 700 engines for the powerplant of ATR’s new ATR 72-600F freighter aircraft. The deal is valued at approximately $1.1 billion (USD). Additionally, the firm announced plans to reduce its workforce by 4,600 people, part of a cost-savings plan designed to improve its financial position and make it more cost-competitive.
The market’s optimism about Rolls-Royce’s prospects comes despite the fact that the company reported a first-half loss of £1.4 billion (GBP) in July, compared to a £1.3 billion loss in the same period a year earlier. The group noted that its restructuring efforts had started to bear fruit, with underlying profit before tax rising to £323 million in the first half of 2020, compared to £259 million in the same period a year earlier.
Shares of Rolls-Royce Holdings have been on an upward trajectory Thursday, outpacing the broader market as traders bet on the firm’s restructuring efforts and new contracts aiding the company’s bottom line. The engineering giant has seen its share price surge by almost a quarter over the past month and close to a third over the year-to-date, with the recent news of a $1.1 billion contract win and 4,600 job cuts boosting investor sentiment. Despite reporting a first-half net loss of £1.4 billion in July, the firm’s underlying profit before tax in the first half of 2020 increased to £323 million from the same period last year, hinting at the efficacy of its restructuring efforts.