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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.