UPDATE 3-Bombardier delays business jet, shares sink as cash burn rises

(Recasts with market reaction, details from conference call)
July 30 (Reuters) - Canadian plane and train maker
Bombardier Inc BBDb.TO reported lower earnings and sharply
higher cash use on Thursday, and pushed back delivery of its new
Global business jet, driving down its share price.
Bombardier, which has been spending heavily to bring its new
CSeries jet into service, used $808 million in free cash flow in
the quarter, up from $424 million a year earlier. It had $3.1
billion in cash and equivalents at the end of the quarter.
The stock dropped 11 percent to C$1.74 on the Toronto Stock
Exchange.
Bombardier is preparing an initial public offering of a
minority stake in its rail unit, which would help shore up its
balance sheet, but on a call with analysts and investors Chief
Executive Alain Bellemare said other options are still on the
table.
"We continue to explore strategic options for our rail
business, given the ongoing industry consolidation," he said.
Later, he said listing the unit could help in "getting ready for
a strategic play" but selling the entire business is off the
table.
The company said its Global 7000 business jet, previously
scheduled to go into service in 2016, is now expected to do so
in the second half of 2018.
Some analysts had suggested a delay was likely as the plane
has yet to make its first flight. Bellemare said developing the
large new jet has been challenging, but he is confident of the
new schedule.
The company also announced a "Bombardier transformation
plan" focused on reducing product cost, controlling working
capital and using cash effectively.
The business jet division has been a key source of cash flow
for the company, which is spending heavily to develop the
narrow-body, medium-range CSeries. But in May Bombardier said it
would cut production of Global 5000 and 6000 jets, citing weak
demand from China, Latin America and Russia.
Net orders for business aircraft fell to eight during the
second quarter from 30 a year earlier, while commercial aircraft
orders dropped to three from 18. ID:nCCN29GcsT
Net income fell to $125 million, or 6 cents a share, in the
quarter ended June 30, from $155 million, or 8 cents per share,
a year earlier. Revenue fell 5.5 percent to $4.62 billion.
Adjusted earnings were $145 million, or 6 cents a share,
down from $192 million, or 10 cents, a year earlier. Analysts
had expected earnings of 5 cents, according to Thomson Reuters
I/B/E/S.