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The roar of jet engines is echoing all the way to the balance sheet. Rolls-Royce $12 Billion Buyback plans electrified markets Thursday as the British aerospace and power systems giant forecast more than £4 billion ($5.42 billion) in profit this year and signaled another chapter of muscular growth.

Shares jumped as much as 7% in early trading before settling up 4.5%, putting the stock on course for a fresh record after already notching multiple highs this year.

Profits Accelerate Ahead of Schedule

Rolls-Royce said it is targeting underlying operating profit of between £4 billion and £4.2 billion in 2026 — comfortably above the £3.65 billion midpoint expected by analysts surveyed by FactSet. Free cash flow is projected at £3.6 billion to £3.8 billion, also beating expectations.

The bullish outlook means the company now expects to hit the upper range of its prior mid-term guidance two years earlier than planned, CEO Tufan Erginbilgic said.

“Our transformation continues with pace and intensity,” Erginbilgic said in a statement, underscoring the speed of the company’s turnaround.

The group upgraded its 2028 targets to £4.9 billion to £5.2 billion in underlying operating profit, an operating margin of 18% to 20%, and free cash flow between £5 billion and £5.3 billion. Looking beyond that horizon, Erginbilgic pointed to tailwinds from artificial intelligence, the global energy transition and rising defense spending.

Multi-Year Buyback Raises the Stakes

Central to Thursday’s announcement was a sweeping shareholder return strategy. Rolls-Royce confirmed it will complete £2.5 billion in share buybacks this year as part of a multi-year program totaling between £7 billion and £9 billion — roughly $12 billion — spanning 2026 through 2028. The scale exceeds earlier media expectations.

The aggressive capital return comes as the company rides momentum across its three core divisions: civil aerospace, defense and power systems.

Transformation Delivers Record Results

In 2025, underlying operating profit leapt more than 40% to a record £3.46 billion, surpassing FactSet estimates of £3.32 billion. Underlying revenue climbed 12% to £20.1 billion.

It marked the fourth consecutive year the company has outperformed earnings expectations — a streak that has fueled investor enthusiasm. Over the past 12 months, shares have more than doubled, buoyed by a sweeping transformation plan launched by Erginbilgic that slashed costs and sharpened focus on core operations.

Jefferies analyst Chloe Lemarie described the beat-and-raise report as a “high quality release,” noting that much of the profit strength stemmed from the power systems unit.

That division, riding a global surge in data center construction reliant on Rolls-Royce power generation systems, generated £4.89 billion in revenue in 2025 — reflecting 19% organic growth year over year.

The civil aerospace segment — the company’s largest revenue and profit contributor — posted 15% growth compared to last year, supplying engines to aircraft makers including Boeing and Airbus. The defense unit advanced 8%.

Rolls-Royce stands among the world’s four leading aero engine manufacturers, alongside Pratt & Whitney, CFM International and GE Aerospace.

Narrow-Body Ambitions Amid Engine Squeeze

Erginbilgic also signaled the possibility of returning to the narrow-body aircraft engine market. Currently, Rolls-Royce focuses on wide-body jets such as the Boeing 787 Dreamliner and the Airbus A330neo.

The comments come at a moment of strain in the global engine supply chain. Aircraft manufacturers are grappling with shortages that threaten delivery schedules.

“We have an unsatisfactory situation with less engines than what we would need,” Airbus CEO Guillaume Faury told CNBC last week, citing tensions with key supplier Pratt & Whitney over 2026 deliveries.

From roaring turbines to record margins, Rolls-Royce’s latest results suggest a company no longer merely rebuilding, but accelerating. With a fortified balance sheet and a bold Rolls-Royce $12 Billion Buyback strategy, the aerospace titan appears determined to convert transformation into sustained thrust.