Wings Magazine

Bombardier’s Q2 net income US$211 million

Aug. 31, 2011, Montreal - Bombardier Inc. reported Wednesday that its net profits soared by US$73 million in the second quarter as both earnings and revenue beat analyst expectations.

August 31, 2011  By The Canadian Press

The Montreal-based transportation giant, which reports in U.S. dollars, said earnings for the three months ended July 31 rose to US$211 million compared with US$138 million in same period last

Per share earnings were 12 cents compared with seven cents last year as quarterly revenues increased 17 per cent to US$4.7 billion from $4 billion.

Bombardier was expected to earn 10 cents per share in adjusted profits on US$4.5 billion of revenues for the period ended July 31, according to analysts polled by Thomson Reuters.

"We delivered good results for the second quarter with increased revenues, profitability and EPS,'' company president and CEO Pierre Beaudoin said in remarks accompanying the results.


Beaudoin said the transportation's division's level of activity remained strong and were a "clear indication of the strength of this segment.''

"While Bombardier Aerospace's level of new orders in both business aircraft and CSeries commercial aircraft improved substantially year over year, we continue to monitor the economic uncertainty and market volatility in the U.S. and Europe,'' he added.

"Both groups (Aerospace and Transportation) were in a situation of free cash flow usage again this quarter, so we must keep our focus on execution. Nevertheless, our very large backlog of $56.9
billion, added to our portfolio of great products, position us well for the years ahead.''

Bombardier Aerospace's revenues in the quarter totalled US$2.1 billion, compared with $1.9 billion last fiscal year, and Bombardier Transportation increased its revenues by 26 per cent to US$2.7
billion from $2.1 billion. A total of 56 aircraft were delivered, compared with 49 for the same period last fiscal year.

Bombardier Aerospace's backlog increased by 20 per cent reaching US$23 billion as at July 31 compared with $19.2 billion on Jan. 31. The 20 per cent increase was mainly attributable to an increase in large business aircraft and CSeries family of aircraft orders, partially offset by a lower order backlog for turboprops and regional jets.

The commercial aerospace business has been affected by slow orders for regional jets and Q400s, which industry observers said could lead to production rate decreases and layoffs.

They forecasted that any rate decrease would likely be focused on regional jets, since Bombardier has already announced a slowdown for turbos later this year.

Business jet orders had been expected to be solid in the quarter but could come under pressure in the third quarter because of declining confidence in the economy and unsolved sovereign debt issues.

Fundamentals for this key part of Bombardier's business are continuing to improve. Aircraft use is up and the number of used planes is decreasing. Rivals such as Gulfstream, Dassault, Cessna
and Embraer have all pointed to higher orders in the second quarter, particularly in the large cabin segment.

The order activity in the transportation industry continues at a high level across large European customers, the company said. During the second quarter, Bombardier Transportation reported $3.9 billion of new orders, representing a book-to-bill ratio of 1.5, compared with $4.3 billion of new orders last fiscal year.


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