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Bombardier stock climbs to near six year high: clear skies ahead?

June 3, 2008, Toronto - Bombardier Inc. shares (TSX:BBD.B) climbed nearly four per cent to their highest level in almost six years Monday on optimism about the international plane and train maker's upcoming
quarterly results and longer-term outlook.


June 3, 2008
By Carey Fredericks

June 3, 2008, Toronto – Bombardier Inc. shares (TSX:BBD.B) climbed nearly four per cent to their highest level in almost six years Monday on optimism about the international plane and train maker's upcoming
quarterly results and longer-term outlook.

Bombardier, which will release first-quarter numbers at its annual meeting Wednesday in Montreal, recently raised its forecast for global business jet sales, and RBC Dominion Securities analyst Nick Morton commented in a note that investor interest often surges ahead of the Farnborough Air Show in July.

“Bombardier may provide an update on the CSeries (a proposed larger jetliner) and there is a possibility of a launch decision with a lead order from Asia, the Middle East or Europe,'' Morton wrote, observing that the Montreal-headquartered company is a global player that "offers opportunity to invest in two leading sectors: aerospace and transportation.''

Bombardier shares traded as high as $8.35 Monday on the TSX, their highest price since August 2002 following a steep descent from over $21 in 2001.

The shares closed at $8.20, up 30 cents, with more than 23.7 million traded in Toronto, making it the most active issue on the TSX Monday. A month ago Bombardier was at the $6.50 level.

Earnings per share for the quarter ended April 30 are expected to be eight cents, double the year-ago bottom line, according to analyst estimates compiled by Thomson Financial.

At the annual meeting, Pierre Beaudoin takes over CEO from his father, Laurent Beaudoin, who will remain chairman. Pierre Beaudoin is a grandson of the company founder J.-Armand Bombardier, whose descendents continue to control the family through their multiple-vote A shares.

RBC's Morton, whose share-price target is C$8.50, said the company's balance sheet is improving, with US$3.6 billion of cash against $4.4 billion of debt at Jan. 31, and Bombardier's credit rating appears en route to recovering to investment grade.