ARM.L Share News (ARM)

* Warren East to replace John Rishton in July

* East led ARM to dominance in mobile phone chips

* Shares in Rolls-Royce climb to eight-month high (Adds detail, exec comments, analysts, shares)

By Paul Sandle

LONDON, April 22 (Reuters) - Aircraft engine makerRolls-Royce has turned to one of Britain's mostsuccessful technology executives, Warren East, to restore itsfortunes after a year marred by falling profit, job cuts andcancelled orders.

The British company's surprise announcement on Wednesday saidthat John Rishton would retire in July after four years at thehelm and will be succeeded by the former head of ARM Holdings, Britain's biggest listed technology company.

East, who has been a non-executive director of Rolls-Roycesince January last year, was chief executive of ARM between 2001and 2013, overseeing its expansion as a leading developer ofmicrochips for the likes of Apple and Samsung.

Shares in Rolls-Royce rose to an eight-month high in earlytrading, with JP Morgan upgrading the stock to "hold"from "underweight".

Analysts at the bank said that East, 53, would bring renewedvigour to the development of civil aviation engines and to thechallenges posed by shrinking western defence budgets and alower oil price that has squeezed customers in the oil gas andmarine sectors.

East, who plays the organ at his local church and favourssober suits rather than the polo-shirted look adopted by manyU.S. technology executives, said that the opportunity was one hecould not refuse.

Rolls-Royce Chairman Ian Davis, meanwhile, spoke of East's "stellar record" at ARM since taking over after the dot-combubble burst in 2001. A pound invested in the company's stock acouple of years later would have been worth 18 pounds ($27) bythe time he left.

East's engineering background with ARM is also seen as a keyattribute as Rolls-Royce looks to develop quieter and moreefficient engines for aircraft made by Boeing and Airbus, Edison Research analyst Roger Johnston said.

TOP GAINER

Rolls-Royce shares, which have fallen 19 percent since thestart of 2014, were the top gainer on the blue-chip FTSE 100index at 1204 GMT, up 3 percent at 10.36 pounds.

Rishton, 57, steps down after a difficult period for the131-year-old company. A decade of strong profit and revenuegrowth came to an end last year, followed by a warning inFebruary that profit would fall by as much as 13 percent thisyear.

Chairman Davis acknowledged there had been shareholderdisquiet around the time of the profit warnings, but Rishton'sdecision to stand down was entirely his own.

Rishton said that after 14 years of being a CEO and CFO hewas "leaving for a change of lifestyle".

East will also take over in the midst of a restructuringprogramme, with 2,600 jobs being cut from a global total ofabout 55,000, as the group attempts to compete with bigger andmore profitable U.S. rival General Electric.

He will be helped, however, by last week's momentum-boostingorder to supply engines for 50 Airbus A380 planes for Emiratesairline. The $9.2 billion deal is the biggest in theBritish company's history.

East declined to give details about his strategy before hestarts in the role, but he said that "the transformationsabsolutely need to continue and be driven through toconclusion".

He will receive a base salary of 925,000 pounds ($1.4million) a year, plus a pension and performance-related bonus,the company said, adding that the benefits are in line with orbelow those offered to Rishton.($1 = 0.6650 pounds)

(Editing by David Goodman)