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Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Rolls-Royce has raised its profit forecast and plans to pay a dividend for the first time since the pandemic as chief executive Tufan Erginbilgiç’s efforts to restore the UK engineering group’s fortunes pay off.

Shareholders in the FTSE 100 company, whose engines power civil aircraft, submarines and military jets, last received a payout in 2020, shortly before the pandemic.

Announcing its first-half results on Thursday, Rolls-Royce said it would resume payouts at its full-year results. Payments will start at a 30 per cent payout ratio of underlying profit and then shift to a ratio of between 30 per cent and 40 per cent a year.

Shares in Rolls-Royce surged 10 per cent in early trading after the announcement, taking their gains this year to over 60 per cent.

Since taking over as chief executive in early 2023, Erginbilgiç has focused on rebuilding the group’s balance sheet and improving its profitability.

Rolls-Royce is also benefiting from the rebound in international travel as the company makes most of its money maintaining and servicing its engines when they are flying.

Alongside the resumption of the dividend, Rolls-Royce increased its forecast for underlying operating profit this year to between £2.1bn and £2.3bn. It is targeting free cash flow of between £2.1bn and £2.2bn, higher than its previous guidance of £1.7bn to £1.9bn.

The company is “expanding the earnings and cash potential of the business in a challenging supply chain environment, which we are proactively managing”, Erginbilgiç said on Thursday.

Revenues in the first six months of the year rose to £8.1bn, up from £6.9bn a year ago. Underlying operating profit surged to £1.15bn from £673mn.

Despite the strong results, Erginbilgiç warned that the supply chain environment remained difficult. The industry has struggled with a shortage of skilled labour and key components coming out of the pandemic, which has hampered plans by Airbus and Boeing to ramp up production of aircraft.

Erginbilgiç said he expected the supply chain challenges to last for another 18 to 24 months.

Unlock the Editor’s Digest for free

Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.

Mark Zuckerberg said on Wednesday that strength in Meta’s core advertising business will allow the company to continue spending heavily on artificial intelligence next year and beyond, reassuring Wall Street as shares rose as much as 8 per cent.

Zuckerberg, Meta’s chief executive and founder, was eager to show that investments in AI were bearing fruit during an earnings call with analysts on Wednesday, pointing to examples such as improvements to its recommendations engine. The company’s Meta AI chatbot was also on track to become the most-used AI assistant in the world by the end of the year, he said.

However, he acknowledged that while products such as the chatbots would increase engagement with its platform, it would take “years” for the “monetisation of any of those things by themselves”.

Wall Street has been concerned by the surge in AI spending at Big Tech groups such as Microsoft, given the costs of training and maintaining models, as well as investing in the infrastructure to underpin it.

But Zuckerberg has been attempting to win over investors with his AI vision, promising to help advertisers automate their processes and better target ads to users, and that its chatbots will be able to assist users, creators and businesses.

In a sign of future infrastructure demands, Zuckerberg warned that the amount of compute needed to train Llama 4, its next large language model, would “likely be almost 10 times more” than what was used to train the current Llama 3 model and that would continue to grow with future models.

“At this point, I’d rather risk building capacity before it is needed, rather than too late,” he said, adding that next year the company would be planning the compute clusters it needs for the next several years.

In the meantime, concerns over the costly projects were offset by bumper results.

Revenue at the social media group jumped 22 per cent to $39.1bn in the past three months, beating analysts’ expectations of $38.3bn and the high end of its own forecast, which was $39bn. Analysts noted this was driven by a 10 per cent jump in both ad impressions and the average price per ad.

For the third quarter, Meta forecast revenues of $38.5bn to $41bn, topping estimates of a rise to $39.2bn.

“At the end of the day, we are in the fortunate position where the strong results that we’re seeing in our core products and business give us the opportunity to make deep investments for the future, and I plan to fully seize that opportunity to build some amazing things that will pay off for our community and our investors for decades to come,” Zuckerberg told analysts.

Net income at Meta — whose platforms include Facebook, Instagram and WhatsApp — rose 73 per cent to $13.5bn, above consensus expectations of an increase to $12.3bn, according to data from S&P Capital IQ.

However, it also raised the bottom of its range for full-year capital expenditure guidance from $35bn-$40bn to $37bn-$40bn.

Shares of Meta, which are up more than 35 per cent this year, rose as much as 8 per cent after the release.

The rising shares represent a turnaround from its previous quarterly results in April, when shares tumbled more than 10 per cent after Meta raised the high end of its full-year capex guidance in order to boost its AI infrastructure and plans.

Shares of rival Microsoft this week dipped lower even after it posted double-digit sales and earnings growth as it warned that already rising capex would continue to rise next year.

“We think [Meta] is doing a good job managing AI infrastructure costs. Still, we expect capex to rise considerably in 2025,” said Angelo Zino, technology equity analyst at CFRA Research.

“[We] believe Meta continues to be a share taker in the broader digital ad market, partly reflecting its more aggressive AI tactics to improve content [and] ad tools.”

Zuckerberg has recently conducted a publicity tour to tout his plans for the company to become the leader in AI, as well as the developer of smart glasses that he believes will overtake mobile devices as the next computing platform.

In a post last week, Zuckerberg said Meta’s latest open-source large language model, Llama 3.1, was now “frontier level”, catching up with the powerful AI model of rivals such as OpenAI, Google and Anthropic. Next year, he said future Llama models would “become the most advanced in the industry”.

After keeping an audience of interrogators waiting, Donald Trump finally arrived on stage for his Wednesday appearance at the convention for the National Association of Black Journalists over an hour late. He blamed the delay not on the furious behind-the-scenes between the NABJ and his campaign about whether he could be factchecked in real time, but on what he described as organizers’ inability to calibrate the audio equipment in time for his highly controversial panel discussion. “It’s a disgrace,” he snarled.

When ABC’s Rachel Scott opened the proceedings by asking the former president his impetus for addressing the Black journalists, women and Chicagoans in the crowd who have been regularly subject to his hostility, Trump dismissed the question as “horrible” and called Scott “nasty” before turning his bluster meter up to 11.

He declared himself the best president since Abraham Lincoln for “the Black population”. He pushed back on the idea that Kamala Harris would identify as Black. (“She was Indian, and then all of a sudden she made a turn and she went.”) He enunciated the word with such contempt, as if coughing up a hairball – buh-LAAAAA-kuh. All the while, crowd reactions whipsawed from incredulous laughter to deep groans. At one point the discussion shifted to Sonya Massey, the latest Black person to be unlawfully killed by Chicago police. “Are you talking [the one] with the water?” Trump asked to audible gasps.

Before that, outright anger was the prevailing emotion among many NABJ members who saw the decision to have Trump at the annual conference and career fair as a betrayal of the association’s core values. The Washington Post’s Karen Attiah, who resigned her position as co-chair of the convention’s organizing committee in protest, was among a slew of Black journalists who spoke out about the association’s decision to even invite the presumptive Republican nominee.

NABJ president Ken Lemon defended the decision as part of a tradition of questioning national party leaders – from presidents Bill Clinton and George W Bush, to nominees Barack Obama and Bob Dole. What’s more, Lemon said, they had invited Harris, but her campaign would only commit to a video interview. Trump, however, was happy to attend in person. How could he pass up an opportunity for face time with “the Blacks”?

Trump hasn’t exactly been subtle in his courtship of Black voters, from casting the former video vixen Amber Rose in a speaking role at the Republican national convention to promoting his rap sheet and assassination as forms of street cred. Lemon and others in NABJ leadership spun the Trump panel as an opportunity to hold his feet to the fire. But it was the attendees who were held up in the end; many panels were delayed and outright canceled to accommodate Trump, prompting more convention desertions.

It’s a wonder more didn’t change plans earlier after waiting for hours to be let into the venue, a giant auditorium at the end of an impressive ballroom. The security check, run by the Secret Service, was more thorough than the usual airport experience – fresh in the minds of some attendees who had rushed in straight from the plane. As more people streamed in, funk music blasted overhead, giving Trump’s appearance more of a concert vibe. More than a few whipped out their camera phones to take snaps with Trump’s empty stage chair in the background. High on a projection screen just behind was a graphic of the NABJ conference logo with the slogan writ large: “Journalism over disinformation”. You can understand why people might be upset. “I don’t know if surreal is the right word,” Brittny McGraw, the news chief at Nasa told me, “but perhaps that is the word I will go with.”

When Trump finally did take the stage, he played the hits – vowing (again) to close the border, cut inflation (how?) and “drill, baby, drill”. Pitted against the three-woman interview team that also included Semafor’s Kadia Goba and Fox News’s Harris Faulkner, he reserved all of his invective for the “rude” Scott – who seemed unhappy at having to go through with this farce and stood firm in the face of increasing attacks.

When she cut Trump off mid-digression in hopes of pivoting to another question before time ran out, Trump snapped: “You’re the one who held me up!” In their back and forth, Trump seemed to have another Black woman in his sights. He might’ve spent more time directing his attacks at Harris if he wasn’t still so fixated on beating up on Joe Biden for being old; never mind that all his complaining about not being able to hear the questions on stage made him look even older in those moments. After about 35 minutes, thankfully, it was over.

In theory, being interrogated by three Black women should have worked against Trump. Doubtless his many supporters will take his performance as confirmation of his fitness for the fight against Harris. But for the many in the room who could see past the bluster, Trump looked for all the world like an old crank who can barely hear or have a thought without somehow making it racist. Asked by Goba how he’d know if he was too old to stay in the job, Trump didn’t hesitate to take another shot at Scott. “Look, if I came on stage and got treated so rudely as this woman,” he said, still smarting from her pointed line of questioning. That was the payoff the NABJ had hoped for, and Trump never looked more exposed.