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Busy week for Rolls-Royce

Rolls-Royce shares have underperformed despite a series of big engine deals and EPS forecasts look conservative
October 9, 2013

Rolls-Royce (RR.) has had a pretty productive week. Having just bagged two new US government contracts worth $496m (£308m) in all, the aero engineer said its super-efficient Trent engines would power 31 Airbus A350 XWB jets ordered by Japan Airlines. It didn't say what the second contract was worth, but a deal signed last month to supply Lufthansa with engines for 25 planes was valued at $1.5bn. Admittedly, that included a lucrative services contract, but it gives us an idea.

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Most of the American money is being spent on a six-year contract for parts and support for thousands of T56 engines used by the US Air Force, Navy, Coast Guard and border control. The remaining $90m will cover repairs for T56-powered E-2 Hawkeye aircraft.