The Motley Fool

Why Shares In Rolls-Royce Holding PLC Plummeted

Although we don’t believe in timing the market or panicking over every stock fluctuation, understanding how a business is performing, competing and changing is vital to sensible investment.

Rolls-RoyceWhat: Shares in Rolls Royce (LSE: RR) (NASDAQOTH: RYCEY.US) plunged by 12% to 1066p during early trading this morning, following publication of its final results statement for 2013, in which it forecast flat revenue and profit for the year ahead. Naturally, the dividend was increased by 13% to 22p, adding a nice lick of paint to the bottom of a rusty bucket.

5G is here – and shares of this ‘sleeping giant’ could be a great way for you to potentially profit!

According to one leading industry firm, the 5G boom could create a global industry worth US$12.3 TRILLION out of thin air…

And if you click here we’ll show you something that could be key to unlocking 5G’s full potential...

So what: This is the first time in 10 years that Rolls Royce, the world’s second largest aircraft engine maker, doesn’t expect to see revenue growth. The firm reported a 41% drop in net profit as lower demand for defence equipment cut into sales. Before today, the stock had risen 23% over the last 12 months.

Now what: The chief executive, John Rishton, commented:

“Our priorities remain the 4Cs: Customer, Concentration, Cost and Cash. There has been good progress on Customer, particularly with on-time delivery. On Concentration, we continue to focus on our two technology platforms of gas turbines and reciprocating engines.  We achieved a cash inflow of £359m and improved our inventory turns.  On cost, there is more to do.”

The company will continue to look for growth opportunities and expects revenue to pick up again in 2015. Costs will be reduced as the company looks into areas where savings can be made, such as moving production away from high cost countries. Last month the group confirmed it was in consultation over cutting nearly 400 jobs at its Ansty plant, near Coventry.

After this morning’s price movement the shares may therefore trade on a P/E of  16 and offer a possible income of 2%.

The decision to ‘buy’ — based on those ratings, today’s results and the wider prospects for the aerospace sector — is, of course, entirely your decision.

“This Stock Could Be Like Buying Amazon in 1997”

I'm sure you'll agree that's quite the statement from Motley Fool Co-Founder Tom Gardner.

But since our US analyst team first recommended shares in this unique tech stock back in 2016, the value has soared.

What's more, we firmly believe there's still plenty of upside in its future. In fact, even throughout the current coronavirus crisis, its performance has been beating Wall St expectations.

And right now, we're giving you a chance to discover exactly what has got our analysts all fired up about this niche industry phenomenon, in our FREE special report, A Top US Share From The Motley Fool.

Click here to claim your copy now — and we’ll tell you the name of this Top US Share… free of charge!

> Mark does not own shares in Rolls Royce.

Our 6 'Best Buys Now' Shares

The renowned analyst team at The Motley Fool UK have named 6 shares that they believe UK investors should consider buying NOW.

So if you’re looking for more stock ideas to try and best position your portfolio today, then it might be a good day for you. Because we're offering a full 33% off your first year of membership to our flagship share-tipping service, backed by our 'no quibbles' 30-day subscription fee refund guarantee.

Simply enter your email address below to discover how you can take advantage of this.

I would like to receive emails from you about product information and offers from The Fool and its business partners. Each of these emails will provide a link to unsubscribe from future emails. More information about how The Fool collects, stores, and handles personal data is available in its Privacy Statement.