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Bombardier Posts Quarterly Earnings of 8 Cents a Share, Matching Estimates
Bombardier Inc., the world’s third- largest commercial planemaker, posted a 27 percent drop in second-quarter profit while saying the aerospace unit is seeing “signs of recovery” as fewer airlines cancel orders.
Net income dropped to $148 million, or 8 cents a share, in the three months ended July 31, from $202 million, or 11 cents, a year earlier, the Montreal-based company said in a statement today. Earnings met the 8-cent average of 14 analysts’ estimates compiled by Bloomberg, while sales came in lower than expected.
Chief Executive Officer Pierre Beaudoin has cut jobs and output in the past two years as sales slowed. Free cash flow, or cash left after expenses and investments, was lower than expected by analysts including Walter Spracklin at RBC Dominion Securities Inc. and Benoit Poirier at Desjardins Securities Inc.
“Free cash flow was weaker than expected,” wrote Poirier, who rates the stock a “buy.” The “weakness appears to be mostly in Transportation, where we had expected solid bookings to have a more pronounced impact.”
Beaudoin said today on a conference call with analysts that he sees a “catch up” to the goal of neutral cash flow in the second half of this year. He said the aerospace unit is seeing “signs of recovery” as fewer airlines cancel orders.
Bombardier’s total order backlog jumped to $47.4 billion on July 31 from $44.4 billion on April 30 and $43.8 billion on Jan. 31, Bombardier said.
Sales at the aerospace unit fell to $2 billion from $2.4 billion a year earlier, while revenue at the transportation unit declined to $2.1 billion from $2.5 billion, Bombardier said. New orders at the transportation unit rose to $4.3 billion from $3 billion a year earlier, the company said.
CSeries Jet
Guy Hachey, president of the aerospace unit, said at the Farnborough Air Show in July that some prospective buyers for the CSeries jet, which aims to compete in the single-aisle market with larger planemakers Airbus SAS and Boeing Co., were waiting for more signs of rebounding economies and an ability to get financing before placing orders.
Louis Chenevert, CEO of United Technologies Corp., which owns Pratt & Whitney, the engine maker with the sole power plant on the CSeries, said during a Webcast presentation today that Bombardier has a “full pipeline” of potential CSeries customers and expects order announcements by year-end.
Total sales fell about 18 percent to $4.08 billion in the quarter, Bombardier said, compared with analysts’ average estimate of $4.52 billion. Revenue in 2011 may be below 2010, with fewer regional- and business-jet deliveries, Beaudoin said in June.
Bombardier rose 3 cents to C$4.47 in Toronto trading at 10:05 a.m.
To contact the reporter on this story: Rachel Layne in Boston at rlayne@bloomberg.net.
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