TORONTO - Bombardier Inc. posted a 23 percent gain in fiscal third-quarter profit and named Pierre Beaudoin as chief executive .
Net income climbed to $ 91 million, or 5 cents a share, from $ 74 million, or 4 cents, a year earlier, the Montreal-based company said Wednesday, matching analysts´ expectations. Sales in the three months ended Oct. 31 rose 24 percent to $ 4.23 billion.
Bombardier, parent company of Wichita-based Bombardier Learjet, is benefiting from orders for its Q400 turboprop from airlines looking to trim their fuel bills, and for its business jet business.
"I´m surprised how well they did, given the dollar," said Rick Hutcheon, who manages about $140 million as chief investment officer at RKH Financial in Toronto. The Canadian currency has climbed 17 percent against the U.S. dollar this year, creating a headache for the company, which prices most of its aircraft in American money.
It´s "extremely difficult to adjust" to such currency gains, Beaudoin said on a conference call with analysts. Bombardier´s aerospace unit posted a $23 million charge in the quarter because of a change in foreign exchange assumptions and higher Canadian aircraft production costs.
Beaudoin, 45, has worked 22 years at Bombardier, including the past six as aircraft unit head. He will take over as CEO on June 4, succeeding his father, Laurent Beaudoin, who will remain chairman.
Pierre Beaudoin "has earned the respect and support of our customers and employees," Laurent Beaudoin said on the conference call. The elder Beaudoin said he would be "available for advice" if management calls upon him.
Earnings before interest and tax at the aerospace unit more than doubled to $ 122 million, widening that division´s margin, or profit as a percentage of sales, to 5.2 percent from 2.3 percent a year earlier.
Bombardier won orders for 112 business aircraft in the third quarter, up from 57 a year earlier, pushing its order backlog to a record $ 19.6 billion.
"There´s been talk of the U.S. slowing down, but we haven´t seen that so far," Pierre Beaudoin said on the call. Demand is "very strong" for Bombardier´s CRJ regional jet, while new orders for its Q400 turboprop from carriers including Qantas Airways Ltd. show customers still believe in the aircraft´s safety, he said.
"It´s a very green aircraft that offers great economics" to carriers, he said.
Bombardier will use existing cash reserves to buy back $ 1.1 billion of long-term debt, executives said in the conference call. A new head of Bombardier´s aerospace unit will be named by the time Pierre Beaudoin becomes CEO, they said.