Bombardier says it’s prepared for unstable market ahead, reports US$27M Q3 profit
November 3, 2022 By The Canadian Press
MONTREAL — Bombardier Inc. says it is prepared for an unstable market ahead as the aircraft manufacturer reported a third-quarter profit compared with a loss a year earlier.
Chief executive Eric Martel told a conference call to discuss the Montreal-based company’s latest results Thursday that it is “well-equipped” for any market condition ahead.
“All in all, we are well-positioned to maintain our growth curve steadily as outlined in our investor data this year toward 2025,” he said.
Chief financial officer Bart Demosky said that it was an “exciting time” for the company despite a possible recession, as an increased number of backlogged orders have provided “predictability and viability” into 2023.
The company currently has a backlog of around two years worth of orders, said Martel, as the global economic outlook continues to worsen.
On Wednesday, the U.S. Federal Reserve raised its benchmark interest rate by three-quarters of a percentage point for a fourth straight time to tackle stubbornly hot inflation.
Regardless of global economic uncertainty, the company said its plan for expansion will continue as normal, with a 15 to 20 per cent production increase next year.
“Despite all the challenges the supply chain is offering, we have been extremely proactive in the last two years and a half, managing the situation and we are looking forward with that confidence in terms of our deliveries,” said Martel.
“We have pretty much everything under the roof of our facility right now to be capable of delivering what we said we were going to do,” he said.
The maker of private jets, which keeps its books in U.S. dollars, said Thursday its net income amounted to US$27 million or 20 cents per diluted share for the quarter ended Sept. 30. The results compared with a loss of US$377 million or US$3.98 per diluted share in the third quarter of 2021.
Debt repayment remains the top priority, said Martel, as Bombardier paid off $100 million in debt, well ahead of 2025 net debt objectives.
The aircraft manufacturer’s gross debt has been reduced to $6.2 billion, and the company is now approaching annualized savings of $300 million in cash interest via debt reduction actions, Demosky said.
“We have remained active on debt management since our last earnings call,” Demosky said. “We are not done here, and we expect to continue being active and opportunistic on our debt repayment in the coming quarters.”
Revenue for the quarter totalled US$1.46 billion, up from US$1.45 billion in the same quarter last year.
On an adjusted basis, Bombardier said it lost 10 cents per share in its latest quarter compared with an adjusted loss of US$1.05 per share a year earlier.
Analysts on average had expected a loss of 48 cents per share and $1.6 billion in revenue, according to estimates compiled by financial markets data firm Refinitiv.
Walter Spracklin, an analyst for RBC Dominion Securities, said in a note to clients that the results for the third quarter are in line with estimates.
“We are in a great place entering Q4, and we are absolutely on track to meet or exceed our 2022 full-year guidance,” Demosky said.
The company’s share price gained more than nearly seven per cent in midday trading, with the stock up C$2.62 at C$41.81.
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