Bombardier adjusted earnings fall

Canadian aerospace firm misses estimates amid soft aerospace market.

Comments Off on Bombardier adjusted earnings fall October 31, 2013
by Canadian Press

MONTREAL — Bombardier Inc. says it’s disappointed with the general market conditions and the low level of aerospace orders it received in the third quarter.

The Montreal-based plane and rail equipment maker had adjusted net income of $165 million in the three months ended Sept. 30, or nine cents per share — one cent below estimates.

Third-quarter revenue totalled $4.1 billion, down slightly from $4.2 billion in the same period last fiscal year and also below analyst estimates, due to a decline in Aerospace revenues.

Bombardier Aerospace’s revenues amounted to $2 billion in the quarter, down from $2.3 billion in the corresponding period of 2012.

The aerospace division delivered 45 aircraft during the quarter, compared to 57 for the same period last fiscal year, and received 26 net orders.

“In aerospace, results were in line with our guidance, but the low order intake and overall market conditions were a disappointment,” said Bombardier president and CEO Pierre Beaudoin.

Bombardier was expected to earn 10 cents per share in adjusted profits on US$4.55 billion of revenues in the third quarter, according to analysts polled by Thomson Reuters. That compares to 12 cents per share on US$4.34 billion of revenues in the prior year.

The quarter is the first since the company successfully launched its initial flight of its CSeries commercial aircraft.

Revenues at Bombardier Transportation, the company’s rail division, totalled $2.1 billion in the quarter, up from $1.9 billion in the same period last year.

New orders at Transportation reached $1.7 billion compared to $2.2 billion for the same quarter last fiscal year and the order backlog totalled $32.6 billion by the end of September.

“Our revenues in transportation have increased and free cash flow has also slightly improved,” said Beaudoin. “The overall market remains resilient and as illustrated by some order wins during the quarter, our penetration of new regions continues to be strong.”

Industry observers are eagerly awaiting new CSeries orders.

The Montreal-based company has been talking to Air Canada, Indonesia’s Lion Air and Iraqi Airways about potential orders for the new 110- to 160-seat aircraft.

Although the airplane maker has announced more than US$3.8 billion of new orders in the quarter, most of them are for business aircraft instead of regional jets or turboprops.

The world’s only manufacturer of planes and trains has nearly 72,000 employees around the world.

© 2013 The Canadian Press