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Bombardier aggressively seeks new orders

1-Apr-2011

Bombardier's shares soared 13% yesterday on the release of its financial report.

Bombardier Aerospace COO Guy Hachey stated the manufacturer is watching its aerospace order backlog closely to determine if current production rates are sustainable. The order backlog for its Q400 turboprops declined to 13 months in 4Q2010 from 16 months at the end of 3Q2010 while its CRJ backlog stands at 23 months, down from 33 months. The company's target backlog is around 20 months.

Mr Hachey said Bombardier is seeing "an enormous amount of activity" on its 100-149-seat all-new CSeries. Speaking to Dow Jones, he said: "We're seeing a lot of interest in the aircraft. We expect things to pick up in 2012."

He added that the manufacturer is not anticipating any delays to the CSeries. First flights will occur in 2012 with Mr Hachey adding that the company is "very comfortable" with the programme's progress. He added that it has seen no CSeries orders lost to the A320neo adding that the 100-130 seat CSeries does not compete directly with the Airbus product.

Bombardier's financial highlights are as follows:

  • Three months ended 31-Jan-2011:
    • Revenue: USD5372 million, +0.4% year-on-year;
    • EBITDA: USD466 million, +11.8%;
    • EBIT: USD367 million, +27.4%;
      • Bombardier Aerospace: USD181 million, +70.8%;
    • EBT: USD366 million, +60.5%;
    • Net profit: USD318 million, +79.7%;
  • 12 months ended 31-Jan-2011:
    • Revenue: USD17,712 million, -8.5%;
      • Bombardier Aerospace: USD8614 million, -8%;
    • EBITDA: USD1460 million, -8.5%;
    • EBIT: USD1050 million, -4.4%;
      • Bombardier Aerospace: USD448 million, -5.3%;
    • EBT: USD931 million, +1.7%;
    • Net profit: USD +8.2%;
    • Order backlog:
      • Bombardier Aerospace: USD16,600 million, -0.6%;
    • Net aircraft orders: 201, compared with 11 in FY2010;
    • Aircraft deliveries: 244, compared with 302 in FY2010.

According to its financial report: “We continue to closely monitor the indicators that impact the commercial aircraft market. As these indicators continue to improve, we believe that the market will continue to strengthen at a moderate pace. Deliveries decreased by 30% between calendar years 2009 and 2010, as OEMs reduced production rates to adjust to the lower demand. We believe that calendar year 2010 was the trough and that deliveries will now start to increase, at a moderate pace. We also believe that orders for new aircraft will increase in calendar year 2011 as compared to calendar years 2010 and 2009. While orders should improve in calendar year 2011, we expect to deliver approximately 90 commercial aircraft in the 11-month period ending December 31, 2011, compared to 97 commercial aircraft delivered in the 12-month period ended January 31, 2011.”

Selected Aerospace daily share price movements (% change): 1-Apr-2011


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