UPDATE 2-Rolls-Royce H1 profit up, sticks to guidance

* Underlying pretax profit up 9 pct to 445 mln stg

* Revenues up 27 percent, helped by sterling weakness

* Maintains full-year guidance for broadly flat profit

* Expects recovery in global markets to be slow

* Shares up 7 percent

(Adds CEO comments, shares)

By Paul Hoskins

LONDON, July 30 (Reuters) - British engine-maker Rolls-Royce (RR.L) posted a 9 percent rise in underlying first-half pretax profit, towards the top end of expectations, and said it was on track to meet full-year goals, sending its shares up sharply.

Civil aerospace engine orders have been strong this year on the back of orders for new aircraft which peaked before the financial crisis hit. Engine sales tend to lag airplane orders.

Rolls-Royce, which makes engines and turbines for passenger planes, fighter jets, ships and power stations said on Thursday underlying pretax profit rose to 445 million pounds ($729 million) from 410 million pounds a year ago.

Analysts had expected a figure of 402.3 million pounds according to the average of four forecasts compiled by Reuters.

Shares in the company rose over 7 percent to 404 pence, as the firm also hiked the mid-way dividend 5 percent to 6 pence.

Rolls-Royce, which split from the luxury car maker of the same name in 1971, said the global trading environment remained very difficult and that it expected recovery to be slow.

"It is difficult to see green shoots (of recovery) in the economy but the decline has slowed in some areas," with oil nd gas remaining active, Chief Executive Sir John Rose said.

But the company repeated its forecast for growth in underlying revenues, broadly similar underlying profits and an increase in the average net cash balance for the full year.

Profits were broadly unchanged in the first half after stripping out currency translation effects, executives said.

First-half revenue rose 27 percent to 5.1 billion pounds, helped by the weakness of the British pound. On an underlying basis, sales rose 17 percent to 4.9 billion pounds.

The company said its order book had grown to 57.5 billion pounds from 55.5 billion at the end of 2008.

"Our order book went up by 3 billion pounds in civil net of cancellations, so we continue to take orders," Rose said.

AIRBUS, BOEING DELAYS

Like other engine suppliers, Rolls-Royce has been affected by delays in production of two modern airliners, the Airbus (EAD.PA) A380 and Boeing (BA.N) 787, crimping revenues from engine deliveries and prompting a build-up in inventory.

The company said aircraft production delays "add to the uncertainty surrounding future engine volumes". It expects civil engine deliveries to fall in 2009 with stable services revenues.

Rose said the Airbus and Boeing delays had removed the equivalent of 300 wide-body aircraft or 100,000 seats from the market in coming years as an "involuntary capacity cut".

On top of delays, several A380 customers have asked to delay deliveries in order to save cash during the downturn.

In other businesses, core profits in marine and defence divisions rose 26 and 30 percent respectively in the first half.

The Obama administration said this week it opposed development by General Electric Co (GE.N) and Rolls-Royce of an alternative engine for the F-35 fighter (LMT.N) [ID:nN28182262]

Rose said the outcome of the tussle with supporters of the project in Congress was "too close to call" but said any cancellation would not lead to significant financial charges.

"It is an opportunity cost in that there wouldn't be a product with us involved satisfying that market," he said.

On Europe's biggest defence project, the Airbus (EAD.PA) A400M military transport aircraft, whose delays have been blamed on engine development problems, Rose said the powerplant was performing well in tests. Rolls shares leadership of a four-nation consortium building the West's largest turbo-prop. (Additional reporting by Tim Hepher, Editing by Paul Sandle and Lin Noueihed)