Rolls-Royce Plc reported strong financial results for the first half of the year, buoyed by increased defence spending, prompting the company to raise its full-year profit forecasts. The British aerospace and defence firm’s shares climbed 6% in early trading, briefly making it the top performer on the FTSE 100 Index.

The company now anticipates underlying operating profits between £4.7 billion and £4.9 billion for 2026, representing a significant upward revision from its previous estimate of £4 billion to £4.2 billion. Underlying earnings for the period surged 46% to £2.53 billion, supported by revenues that rose by 20% to £11.28 billion.

Despite this strong underlying performance, Rolls-Royce’s statutory pre-tax profit fell sharply to £1.93 billion, a decline of more than 50%. The reduction was attributed primarily to adverse exchange rate fluctuations and the impact of divesting certain parts of its business.

The company’s improved outlook reflects growing demand for defence equipment, driven by increased government budgets amid global geopolitical tensions. Rolls-Royce has positioned itself to benefit from this trend through its advanced engine technology used in military aircraft and naval propulsion.

While the company’s core operations showed resilience and growth, the divergence between underlying and statutory results underscores the financial complexities posed by currency market volatility and strategic corporate restructurings.

Rolls-Royce remains a key supplier in the defence sector and is closely monitoring ongoing market conditions as it advances toward its 2026 profit targets.