Bombardier Inc., the world’s third-biggest planemaker, reported second-quarter profit that topped analysts’ estimates as commercial deliveries increased and the company said the business aircraft industry may be stabilizing.
Net income declined to 8 million, or 11 cents a share, from 1 million, or 14 cents, a year earlier. Profit beat analysts’ average estimate of 9 cents. Sales rose less than 1 percent to .95 billion for the three months ended July 31, the Montreal-based company said in a statement today.
The aerospace division delivered 28 commercial aircraft during the quarter, five more than a year earlier, and business jet cancellations continued to exceed the level of new orders. Bombardier shipped a total of 80 planes, nine fewer than a year earlier, exceeding some analysts’ expectations.
“Total aircraft deliveries were higher than our forecast of 65,” Benoit Poirier, an Montreal-based analyst with Desjardins Securities, wrote in a note today to investors. “Consolidated free cash flow of million was above our forecast” of negative 1 million.
Bombardier, the world’s largest business jet maker by sales, rose 32 cents, or 8.4 percent, to C.15 at 12:53 p.m. in Toronto Stock Exchange trading, the biggest intraday increase since Aug. 13.
Repeats Delivery Forecast
The company repeated its full-year shipment forecast for a 10 percent increase in commercial jet deliveries and a 25 percent decline in business jet shipments.
“There are some signs of stabilization in the business aircraft industry, though historically, a lag exists between economic recovery and its positive impact on revenues,” Bombardier said in the statement.
Bombardier has continued to invest in its CSeries family of commercial aircraft and the first is scheduled for delivery in 2013. The planes will feature an airframe built with lightweight composites and aluminum lithium, helping to reduce fuel consumption, according to Bombardier’s Web site. The planes will also have reduced noise and emissions.
During the conference call, Bombardier said there has been no reduction of customer interest in the CSeries.
“The program is still very much on track,” said Guy Hachey, chief operating officer of the aerospace unit.
The company said that about 75 percent to 80 percent of its previously announced job cuts are complete. Bombardier plans to eliminate 1,200 positions in the next few months. Once those reductions occur, job cuts will total about 4,360 positions this year, Isabelle Rondeau, a Bombardier spokeswoman, said today in an e-mail.
Revenue at the aerospace division declined 4.7 percent to .4 billion. Backlog at the unit shrank by .9 billion to .6 billion at quarter’s end from Jan. 31.
The company’s total backlog fell by 0 million to .5 billion at quarter’s end from Jan. 31, including the company’s abandonment of orders from Jet Republic and Italian airline Myair.com, Rondeau said in the e-mail.
Bombardier terminated Jet Republic’s order agreement for 110 Learjet 60 XR aircraft, mid-sized business jets, on Aug. 20, the same day that the European private-plane service suspended operations. The manufacturer said at the time it remained committed to the Learjet 60 XR program and that production of the aircraft in Wichita, Kansas, continues as planned.
The company canceled an order for 15 CRJ1000 aircraft from Myair.com on Aug. 11. The low-cost airline suspended sales after Italy’s national aviation authority revoked its flying permission, according to the carrier’s Web site.
Revenue at the transportation division, which builds commuter and regional trains, rose 5.4 percent to .55 billion.
Bombardier also said today its board approved a 0 million, two-year unsecured revolving credit facility. The company had .8 billion in cash at the end of the quarter.