Bombardier remains optimistic after Q2 loss
The Montreal-based company says the three months ended June 30 included special items that weighed heavily on the quarter.
Bombardier says its aerospace division has just completed a pivotal quarter that puts it on course to profitable growth — but it’s also recording a US$490 million net loss and a slightly deeper adjusted loss than analysts were expecting.
The Montreal-based company — which has recently seen the commercial launch of its CSeries passenger jet after more than a decade of work — says the three months ended June 30 included special items that weighed heavily on the quarter.
Revenue from all sources, reported in U.S. dollars, also fell by nearly $300 million to $4.31 billion from $4.62 billion. Revenue from commercial aircraft was up but there were declines from business aircraft and the company’s rail division.
As a result, Bombardier’s net loss amounted to 24 cents per share — a sharp turnaround from the year-earlier profit of $125 million or six cents per share.
After adjustments, Bombardier’s loss would have been $83 million or six cents per share in this year’s second quarter, compared with a profit of $145 million or six cents per share a year earlier.
Analysts had estimated an adjusted loss of five cents per share and $4.17 billion of revenue, according to Thomson Reuters.
However, Bombardier chief executive Alain Bellemare — who joined the company in early 2015 as the CSeries program was mired in delays and cost overruns — said the company has made “very good progress” on its turnaround plan.
“This was a pivotal quarter for the CSeries as both variants are now certified and the program has begun generating revenue,” Bellemare said.
“Having firmly placed Bombardier on a path to profitable earnings growth and cash generation, we remain focused . . . (on) executing flawlessly on our programs and applying a disciplined and proactive approach to our portfolio.”
Bellemare joined Bombardier about a month after his predecessor, Pierre Beaudoin, announced that the company had put development of a new Learjet model on hold and would cut about 1,000 jobs in order to focus resources on the CSeries program.
The company — controlled by the founding Bombardier-Beaudoin family through a special class of shares — also suspended its dividend in February 2015, announced along with Bellemare’s appointment.
Under Bellemare’s watch, the company has made a number of strategic decisions and deals — including major CSeries orders from Air Canada and Delta, thousands of additional job cuts, and a $1-billion investment from the province of Quebec.
Once the province makes its second $500-million instalment payment in September, it will own 49.5 per cent of a new limited partnership with all the assets, liabilities and obligations of the CSeries aircraft program, including larger versions of the plane beyond the CS100 and CS300 should they be developed.
The federal government has been repeatedly urged to make a similar $1-billion commitment to the company but hasn’t announced one. It did play a role in a complex series of agreements that opened the door for Air Canada to make its order.