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Bombardier’s Q1 revenues surge 25 per cent

May 9, 2013, Montreal – Bombardier's revenues surged 25 per cent in the first-quarter on higher-than-expected aircraft deliveries, while the aerospace and transportation giant said its CSeries commercial aircraft remains on target for its first flight next month.


May 9, 2013
By The Canadian Press

May 9, 2013, Montreal – Bombardier's revenues surged 25 per cent in the
first-quarter on higher-than-expected aircraft deliveries, while the
aerospace and transportation giant said its CSeries commercial
aircraft remains on target for its first flight next month.

Bombardier's net profit slipped to US$148 million or eight cents
per share in the three months ended March 31. That was down from
US$155 million, also eight cents per share, in the same 2012 period.

On an adjusted basis, net income increased four per cent to
U.S. $156 million, up from US$150 million.

That equalled eight cents per share, one penny below analyst
expectations.

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Revenue totalled US$4.3 billion, up from $3.5 billion.

"We had a good first quarter, with an overall increase in
revenues of 25 per cent,'' president and CEO Pierre Beaudoin said in
releasing the company's earnings report.

"Aerospace is showing increased deliveries, revenues and EBIT
(earnings before interest and taxes), and the CSeries tests are
progressing well with first flight next month,'' Beaudoin added.

"Transportation also saw an increase in revenues and EBIT and
received a good level of new orders across all divisions and key
markets totalling $2 billion.''

Beaudoin said the company expects an increase in revenues over
the course of the year, while making good progress towards the
group's EBIT target of eight per cent by 2014.

"With our strong overall backlog of $63 billion and
state-of-the-art products coming into service in the next few years,
we're very well positioned for solid future growth,''' he said.

Meanwhile, Bombardier said one unnamed customer facing financial
difficulties cancelled its order for three CSeries planes.

However, Cameron Doerksen of National Bank Financial said the
move was "immaterial."

"We view management's confidence in its target at such a late
stage in the safety-of-flight testing as a good sign,'' he wrote in
a report.

Bombardier said tests on the critical fly-by-wire system have so
far shown no surprises, but Doerksen said the risk of delay remains.

"We would expect any potential delay to be minimal (i.e. not
another six months).''

Walter Spracklin of RBC Capital Markets described the results as
"reassuring."

"Overall, investors should be very encouraged by these
results," he wrote in a report.

He said the overall results were positive and the transportation
division, which building trains, appears to have "turned the
corner" as margins were 6.7 per cent, up from four per cent a year
ago.

"We were encouraged by the transportation margin expansion that
occurred in the first quarter,'' he wrote.

"This has been a problem area – and while indications were that
issues have been resolved – the margin expansion was excellent
reaffirmation."