Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Bombardier sees higher Global 7500 jet deliveries in fourth quarter, after reporting earnings miss

Published 2020-11-05, 06:00 a/m
© Reuters. FILE PHOTO: Bombardier's logo is seen on the building of the company's service centre at Biggin Hill
ALSO
-

By Allison Lampert and Sanjana Shivdas

(Reuters) - Bombardier expects higher deliveries of its flagship Global 7500 business jet through year's end, after the plane and train maker missed estimates for third-quarter operating profit on Thursday, hurt by COVID-19-related disruptions.

Free cash flow usage was $706 million during the quarter, although Bombardier aims to break even during the second half of 2020.

Global 7500 deliveries should rise to 12 jets during the last three months of 2020, up from eight during the third quarter.

Montreal-based Bombardier is shedding assets, including its rail division to French train maker Alstom (PA:ALSO) SA, to slash debt as it becomes a pure-play business jet maker.

Revenue from Bombardier's transportation unit fell 2.5%, hit by the pandemic and several-low margin projects.

"We are fully aware of the challenges we face," said Chief Executive Eric Martel.

While corporate aircraft deliveries are expected to decline industry-wide by 30% in 2020 due to the pandemic, plane makers are encouraged by revived activity, including a rebound in private flights.

Martel said business jet order activity is improving, especially for its mid-sized Challenger aircraft.

The company's business aircraft order backlog, however, declined to $12.2 billion from $14.4 billion a year ago.

Corporate jet deliveries fell to 24 units in the quarter from 31 a year earlier. But revenue from business aircraft rose about 10% since higher-priced Global 7500s made up a third of deliveries.

Bombardier's margins and earnings before interest, taxes, depreciation and amortization (EBITDA) took a hit on higher initial production costs for the Global 7500 jets and lower deliveries.

Chief Financial Officer John Di Bert said the Global 7500 should start to be profitable as we "get into 2021."

Bombardier reported adjusted EBITDA of $176 million for the quarter ended Sept. 30, compared with $255 million a year earlier.

Analysts on average were expecting EBITDA to be $179.8 million, according to Refinitiv data.

© Reuters. FILE PHOTO: Bombardier's logo is seen on the building of the company's service centre at Biggin Hill

Revenue fell 5.3% to $3.53 billion.

 

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.