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CSeries delays haven’t grossly effected Bombardier earnings

Aug. 1, 2013, Montreal - Bombardier Inc. says the estimated cost of its $3.5-billion CSeries program hasn't been affected by delays to the first test flight of the new passenger jet, which will compete with some of the smaller airliners made by Boeing and Airbus.


August 1, 2013
By The Canadian Press

"Like we have said to our team, it's not a question of rushing,'' chief executive Pierre Beaudoin told financial analysts on a conference call after the company reported a second-quarter adjusted net income of US$158 million.

"We have to learn what we need to learn to get a good flight-test program. If it takes more time, it takes more time.''

The flight tests are scheduled to be conducted for 12 months, Beaudoin said.

Bombardier recently delayed the first test flight for the third time because the last of a series of technical tests are taking longer than expected. It had been aiming for the first test flight by the end of July after a June target that was, itself, later than an expected date in late 2012.

The commercial jet, which will use a new generation of aviation technology, will offer a longer range, a longer cabin, a new engine and key components made of composite materials.

As a result, the CSeries jets will offer more seating than Bombardier's previous planes and have enough range to be used on some routes where airlines have typically used Boeing and Airbus planes.

In its financial results, the Montreal-based aerospace and transportation company said it earned nine cents per share – in line with analyst estimates.

Bombardier's revenue was about US$300 million higher than last year, rising to US$4.4 billion, slightly better than the estimate of US$4.34 billion, but the adjusted earnings were down slightly from the second quarter of 2012.

The company is the world's largest manufacturer of passenger rail equipment and is third largest maker of passenger planes after Boeing and Airbus. Among Bombardier's products are the CRJ line of jets and Q400 turboprop planes used by airlines for some of their routes and several brands of business jet.

Its net income, before adjustments, rose to $180 million or 10 cents per share from $147 million or eight cents per share. Adjusted earnings were $167 million or nine cents per share in the second quarter of 2012.

The adjusted net income, which is more closely watched by analysts, included special items in both Bombardier Transportation and Bombardier Aerospace for both years.

"The outlook for both groups is positive. Our record backlog of $65.5 billion, combined with our significant investments in new products, ensure solid growth in the years to come,'' Beaudoin said.