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16-Jan-2015 10:36 AM

Bombardier downgrades 2014 outlook following review of preliminary results

Bombardier announced (15-Jan-2015) that following a review of preliminary results compiled for the fiscal year ended 31-Dec-2014, it is updating its outlook, after it became clear that certain financial guidance previously provided would not be met.

  • Bombardier Aerospace:
    • EBIT: 4%, reduced from previous guidance of 5%. The variation is mainly due to increased provisions for credit and residual value guarantees, pricing pressure on new aircraft sold, as well as a decrease in fair value of used aircraft.
    • Cash flow from operating activities: CAD800 million, compared to previous forecast of CAD1.2-1.6 billion. Reduction is mainly due to a lower level of customer advances, a lower EBIT and an increase in used aircraft inventory;
    • Net additions to property, plant and equipment (PP&E) and intangible assets: CAD1.8 billion, compared with a previous guidance of CAD1.6-1.9 billion;
    • Deliveries: 290 aircraft, comprising 204 business, 84 commercial and two amphibious aircraft. Deliveries rose 22% increase compared with 2013 (180 business, 55 commercial and three amphibious aircraft). Previous outlook was for 200 business and 80 commercial aircraft deliveries;
  • Bombardier Transportation:
    • EBIT: 5% (before special items), compared to a previous guidance of 6%. This variation is mainly due to revised escalation assumptions for some contracts which impacted estimated future revenues.
    • Free cash flow: Expected to be slightly positive compared with a previous guidance of free cash flow generally in line with EBIT;
    • Revenues: Expected to increase by approximately 9% in 2014 (excluding currency impacts), compared with a guidance of revenue growth in the mid-single digits, with a book-to-bill ratio of approximately 1.3 compared with a guidance in excess of 1.0.
  • Available short-term capital resources (effective 31-Dec-2014): Approximately CAD3.8 billion, including cash and cash equivalents of approximately CAD2.4 billion. [more - original PR]

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