Rolls-Royce Holdings PLC plans to announce a fresh buyback worth up to 1.5 billion pounds ($2 billion) when it reports annual earnings on February 26, according to Sky News. The aircraft engine maker had previously announced a 1 billion pound buyback last year, marking a significant return of capital to shareholders.

The buyback announcement comes as Rolls-Royce has upgraded its annual guidance, expecting stronger profit and free cash flow driven by improving demand from commercial airplane makers. This represents a strong turnaround for the company after the COVID-19 pandemic decimated its civil aerospace business in the early part of the decade. The company is expected to post an annual underlying operating profit between 3.1 billion and 3.2 billion pounds.

The planned capital return signals management's confidence in the company's financial recovery and future prospects. With the civil aerospace sector rebounding and commercial aircraft demand strengthening, Rolls-Royce appears positioned to deliver sustained profitability. The buyback program will reduce shares outstanding while returning value to investors who have weathered the company's pandemic-era challenges.