Now I can keep an eye on one of my monitored stocks which I'm currently in.

...........a once great company going to the dogs. IMO RR strategy has too much over-reach and fails to concentrate on core strengths. Competition tend to focus on their core business soaking up market share in a highly competitive market, especially when passing out of recession.

Cannot see RR SP heading north any time soon, but continuing to slowly head south as profits drop and operating costs deplete company value. Perhaps small recompense will come from cost cutting / staff redundancies and non-core sell-offs, but will be short lived and turn around difficult.

Unfortunately, medium term outlook for RR IMO will be takeover target from bigger player, with a focused and more established product competencies profile; where RR assets would complement their own business.

Henry Royce and Charles Rolls would be beside themselves IMHO.

DYOR
HAb

RR. says 2015 broadly in line, sees 2016 challenge

StockMarketWire.com

Rolls-Royce said while 2015 remains broadly as expected, the group's outlook for 2016 is very challenging. It described Q3 trading as satisfactory, despite a mixed operating performance in several markets. Its overall performance expectations for 2015 are unchanged.

"Overall performance expectations for 2015 remain unchanged, although there have been developments in aerospace and marine markets that have created additional headwinds," the company said.

"For 2015, these should be largely mitigated by a number of positive developments, including cost saving measures; however the headwinds are likely to impact 2016 more than previously expected," it said.

"Compared to the expected outturn in 2015, the key areas of demand weakness are affecting selected aerospace and offshore marine markets.

"In aerospace, these mainly relate to the themes emerging in the third quarter, including sharply lower volumes of corporate jets powered by Rolls-Royce engines, further weakness in demand for corporate jet aftermarket services, further significant declines in aftermarket service demand for our engines on 50-70 seat regional jets and more conservative assumptions on demand reductions for some legacy programmes.

"Together, these impacts on our corporate and regional business account for roughly £100m of our incremental profit headwind.

"Expected demand for new wide-bodied engines remains unchanged from that set out in the summer. Rolls-Royce continues to gain market share in installed thrust and as a result, we should benefit from increased demand in the year for our aftermarket services.

"However, we have begun to see reduced utilisation by some specific operators of older wide-bodied engines. This management of short-term excess capacity, as the market takes delivery of newer, more fuel efficient airplanes, is already starting to impact aftermarket revenue and profit.

"Together with other changes, the incremental profit headwinds for our wide-bodied engine business are expected to be roughly £100-150m.

"In addition, offshore marine markets have continued to deteriorate throughout the year and, as a result, 2016 forecasts have weakened further. As a result, we are setting expectations to reflect a further 15-20% decline in offshore marine market demand, weakening marine profit by a further £75-100m.

"Our preliminary view on 2016 is materially impacted by these new headwinds, together with the changes in demand outlined in our 6 July 2015 update and repeated in our half year results on 30 July 2015.

"These included around £250m of profit headwinds related to lowered volume and pricing expectations for our Trent 700 programme, which are unchanged, combined with a further £50m related to our corporate jet and regional aftermarket businesses, both of which have since weakened further.

"As a result, expectations are that profit headwinds may be around £650m compared to 2015. Many of the headwinds impact higher than average margin segments of the business, or businesses where fixed costs are relatively high. As a result, the profit fall through is significant."

hope you're not holding RR too chris

No cynic, but certainly cheap now. May get even cheaper yet.

The UK economy is going down the drain under Cameron. The whole FTSE 100 shares are not doing well.

chuckle
the uk economy is actually amazingly robust compared to the rest of the world
it's the weakness in china that is currently giving everyone the heeby-jeebies

discussing about weakness is causing problem more than the weakness itself. I think Chinese like the western media as they are expanding while everything is cheap

Their internal economy is doing fine. Just check the number of Chinese travelling to UK and other countries.

Australia is considering limiting the number of visitors as they have difficulty to cope.

Back at 2011 levels. Triple bottom possible but don't hold your breath.

Jefferies note today (House broker):
The underlying profit warning for FY16 – likely down around 30% versus company-sourced consensus – is too great for us to believe anything else will count today. Nonetheless, FY16 cash flow is largely unchanged and some bad news on profits has probably arrived today rather than over a period of years. The equity story is dented, but still stands, in our view. If the negative sentiment quickly exhausts itself, there could be more to play for on 24 November.
Trading update in brief.
FY15 outlook is fine, albeit at the low end of guidance (so PBT nearer £1,325m versus Consensus £1,336m and JEFe £1,324m). The FY16 headwinds are now up to £650m, up from £300m at the 1H15 stage, with an additional £75-100m from Marine, £100m from Corporate/Regional, £100-150m from wide-body aftermarket.
Consensus FY16 PBT is £1,053m (JEFe £956m), so a £300-350m reduction equates to around 30%. There is also a shot across the bows on the dividend, which will be “reviewed” by the Board. That adds an air of gravity to the IMS, but against the backdrop of a “new wide-ranging restructuring programme” that targets gross cost savings of £150-200m per annum, with benefits accruing from FY17 onwards.
Trent aftermarket.
On 22 August 1991, British Airways chose GE90 engines to power its B777 aircraft. It was a dark day; darker than this one. On 15 November 1995, Singapore Airlines ordered Trent 800 engines to power its B777s and the darkness was finally banished. Today, the mist descends again as the Singapore B777s have all been retired and are probably inactive. We knew RR’s data for its installed base included such aircraft, so we knew that aftermarket revenues must have been impacted already to some degree. We believe the same applies to the Trent 500 (A340-500/600) and even to the Trent 700, albeit to a lesser extent. In our forecasts, we simply predicted these engines would steadily leave the installed base and so moderated our TotalCare revenue and EBIT forecasts accordingly. That is our context for today’s caution on the Trent aftermarket – the bad news has come forward as RR manages aircraft/engines that are on the frontier in terms of whether or not they remain in service. There may be some enduring impact on our forecasts for, say, FY18 and FY19, but we doubt it will be material. It is an unwelcome development as to timing and might appear to threaten the equity story, but that is not the case, in our view.
Marine – weak at the knees.
With hindsight, we understand that Marine was flawed in many respects – lack of new product development, too disparate, and largely based in high- cost countries – but was supported by the strength of its major end market, offshore oil & gas. We had aimed low for FY16 (EBIT breakeven), but not low enough. Yesterday, Farstad Shipping referred to pressure on rates, surplus tonnage (despite vessels being stacked) and new vessels remaining on order. We had hoped for relative stability by now, but Farstad predicted no improvement in FY16. As a result, the outlook for services remains bleak and that for new OE orders desolate. The only consolation is that RR’s FY16 cash flow guidance suggests Marine will no longer be haemorrhaging cash.
Red Line.
We harbour no illusions about what could unfold today – the scale of the downgrade for FY16 is too great to be treated with equanimity. We have, however, already set out our stall on cash flows, not profits, so the relatively robust FY16 cash flow (Consensus FCF £44m) is some solace and likewise the new management team stamping its authority on things through a more profound restructuring. Like the 6 July trading update, today we have profits down and cash much less impacted. When calm returns, that may cause the focus to shift from profits to cash flows We believe RR will live to fight another day – 24 November being a start. We believe the RR equity story is dented, but largely intact on a medium-term view."

Cynic, you think UK's economy is so robust? Then why is there so much budgets and cuts everywhere...

because it takes a great deal of pain and effort to get the country living within its means
and has little to do with the underlying state of the economy

If the state of the economy is so robust as you mentioned, there will be no job cuts, problems in the NHS, cuts in social benefits, increasing UK debt, austerity measures and so on.

Ahem...........RR thread!!!

JP Morgan Cazenove reiterates underweight on Rolls-Royce, target cut from 630p to 405p.

hyleo - harry is absolutely right .... address yourself to the TALK thread

Fred is waiting hyleo ..... enjoy

pratt witney patent gearing turbo fans more efficient. RR. buy @ £5 see broker mark downs. the BB ends

LATEST BROKER VIEWS

Date Broker New target Recomm.
16 Dec Haitong... 490.00 Neutral
15 Dec JP Morgan... N/A Underweight
9 Dec JP Morgan... N/A Underweight
4 Dec Deutsche Bank N/A Sell
25 Nov Investec 420.00 Sell
25 Nov Kepler... 470.00 Reduce
25 Nov Barclays... 680.00 Underweight
25 Nov Liberum Capital 560.00 Hold
25 Nov Panmure Gordon 500.00 Sell
25 Nov Exane BNP... 545.00 Neutral
Broker Recommendations for Rolls-Royce Group

According to reports there will be an announcement today of a big order worth £2.9 billion from Norwegian airlines