Rolls-Royce has seen its share price increase by over 6% after it was able to "restore some calm" after a turbulent few months following the beginning of the Middle East conflict.

The FTSE 100 engineering firm said it had a "strong start" to the year across all three of its divisions, with its defence sector recording a good beginning to 2026, following an improved aftermarket performance.

Furthermore, its civil aerospace sector saw growth, driven by its large engine and business aviation aftermarket, with business aviation flying hours ahead of budget.

Demand remains high in its power systems division, with power generation order intake across gas and diesel engines growing by 50% year-on-year in Q1, while revenue growth was also strong.

As a result, Rolls-Royce has reiterated its guidance for the current year, with an underlying operating profit of between £4bn and £4.2bn, with a free cash flow of £2.6bn and £3.8bn.

The firm added that it will continue to deliver on its transformation programme and is “proactively mitigating the impact associated with the conflict in the Middle East.

Chief executive at Rolls-Royce, Tufan Erginbilgic, stated: "We have had a strong start to the year driven by our transformation and self-help, as we continue to further expand the earnings, cash, and growth potential of the business. Operational performance has also been strong across the group, benefiting our customers.

"With our diversified portfolio of three high performing businesses, a net cash balance sheet, and a best-in-class total cash cost to gross margin ratio, we are creating a more resilient and agile Rolls-Royce that is better equipped to respond to changes in the external environment.

"The conflict in the Middle East has created uncertainty for the industry. We are taking the necessary actions to support our employees, customers, and suppliers. We expect to fully mitigate the current financial impact of the disruption to our business. We continue to monitor the situation for any future direct and indirect impacts and will take the necessary actions to mitigate them."

Investment director at AJ Bell, Russ Mould, added that Rolls-Royce’s recent success was interrupted due to the Middle East crisis. However, its trading update has helped "restore some calm".

He concluded: "The clarity of the company’s reassurance that it can fully mitigate the financial impact of Middle East disruption has resonated with investors and helped the company to claw back a bit of ground. Sticking to full-year guidance helped too.

"Rolls typically works on projects with extended timeframes which won’t be affected overnight by geopolitical disruption. Higher fuel costs may even prompt some operators in the aviation sector to upgrade their fleets early to improve efficiency.

"However, the longer the crisis goes on the greater the risk of disruption to the airline sector which then has a knock-on effect in terms of delays and cancellations to existing work. Helpfully the company has strengthened its balance sheet which provides a useful buffer for any stormy weather Rolls might encounter in the market backdrop."

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