Rolls-Royce sticks to 2016 guidance, halves dividend

LONDON, Feb 12 (Reuters) - Rolls-Royce left its 2016 guidance unchanged, in a show of stability after issuing three profit warnings last year, although it halved its dividend to shore up its finances during a slowdown in demand for some of its engines.

The world's second largest maker of aircraft engines had alerted investors to the risk to its dividend in November, when it said it was putting the payout under review amid a further deterioration in its markets.

Rolls-Royce said it would pay shareholders a final dividend of 7.1 pence per share compared to the 14.1 pence it paid out last year, a bigger reduction than the 25 percent cut analysts had been expecting.

For 2016, Rolls-Royce said it continued to expected a profit headwind of 650 million pounds. It reported underlying pretax profit of 1.36 billion pounds last year, a drop of 16 percent from 2014, and in line with a consensus forecast.

(Reporting by Sarah Young, Editing by Paul Sandle)