Rolls-Royce engine drama will hit profits

12th Nov 2010 07:03

Rolls-Royce will make less money than expected in 2010, the company warned Friday, and it's all down to one component in the turbine area of the engine.An investigation into the engine explosion on the Trent 900 powered A380 Qantas super-jumbo has found the failure was confined to the specific component, which caused an oil fire and the release of the intermediate pressure turbine disc.It also reassured that the problem is specific to the Trent 900 and that it is still working closely with the investigating authorities.But shareholders won't be happy despite Rolls trading in line with expectations of underlying profit growth of 4-5% since July."As a result of the recent Trent 900 incident on 4 November, partially mitigated by better performance in the marine and defence businesses, the board now expects underlying profit growth for the full year to be slightly lower than previously guided," the company said.Chief executive Sir John Rose was upbeat though, pointing to the scale of the company's order book, the breadth and mix of its portfolio, the global nature of the business and strong balance sheet.Increasing demand from overseas is also expected to offset the anticipated reduction in revenues from the UK government following the recent Strategic Defence and Security Review.Results for the 12 months to 31 December are due on 10 February.