Strong business jet sales and a buoyant railway sector helped offset a second-quarter dip in Bombardier´s regional aircraft division and pushed the Canadian manufacturer´s net financial performance from the red to the black.
This improvement, which turned a $ 71 million 2007 second-quarter net loss (albeit affected by a special charge) into a $ 246 million net profit, belies an internal shift within Bombardier, which has seen its aerospace division´s revenues go from providing 58.4 percent of the entire company´s sales in the fiscal second quarter of 2006 to 51 percent in the three months to July 31, 2008.
A dip in regional aircraft sales is a significant factor in this shift.
Sales in this year´s fiscal second quarter dropped 13 percent year-on-year to $ 476 million at a time when business jet revenue grew 38.9 percent to $ 1.43 billion.
Regional aircraft net orders stood at just 11 units - almost all turboprops - for the three months to July 31, compared with 84 aircraft in the same period last year.
Business jet orders in the same quarter stood at 163 units, a growth of 59 aircraft year-on-year.
But the regional aircraft slump, which Bombardier attributes to a general uncertainty among the world´s airlines, is currently a minor concern. In a Sept. 4 conference call, the company´s top executives noted that the regional aircraft unit´s backlog, at 280 aircraft, is seven months more than its 21-month internal guideline. And according to Bombardier Aerospace President and Chief Operating Officer Guy Hachey, the slump may be corrected in the final six months of the manufacturer´s fiscal year. "Orders are lumpy at best, [but we expect] Q3 and Q4 to be more normalized," he said during the conference call.
Hachey also noted that supply and production issues that have somewhat affected Q400 deliveries are also about to be resolved.
Regardless of the dip Bombardier´s regional aircraft unit performance, the company produced solid second quarter results. The entire aerospace unit reported a 13.8 percent year-on-year rise in revenue to $ 2.52 billion and just 7.7 percent more in the cost of sales to $ 1.97 billion.
Earnings before interest and taxes grew 78.9 percent to $ 238 million.