BizJet Slump Helps Dull Bombardier Results

Darren Shannon darren_shannon@aviationweek.com

The continued slump in business jet demand continues to affect Bombardier Aerospace, which posted a near 50% year-on-year dip in its fiscal first quarter earnings before interest and taxes, which fell to $110 million in the three months ended April 30.

Revenue for the period fell 6.8% to $2.2 billion due primarily to a 21.7%, or $91 million, decline in services and a $46 million drop in "other" sales.

Manufacturing revenue for the Canadian manufacturer's aerospace division decreased just 1.3%, or $24 million, to a little less than $1.87 billion, the same total as the company's cost of sales for the three months.

"The severe recession affecting most economies worldwide has continued to have a negative impact on our first quarter financial results. At Bombardier Aerospace, although overall deliveries have held up relatively well during the quarter, cancellations in business aircraft have outpaced the level of new orders," said Bombardier President and CEO Pierre Beaudoin in a release.

"We are taking action to cope with the present economic situation and we continue to invest in new products such as the CSeries, the Learjet 85, the ZEFIRO high-speed train and the ECO4 suite of technologies. At $47.4 billion, our large and well-diversified backlog, combined with our strong balance sheet, high level of liquidity, and the cost-cutting measures already in place, will enable us to weather the storm," added Beaudoin.

Aerospace's backlog totaled $22.4 billion on April 30, about $900 million below the backlog posted at the same time last year.

First quarter deliveries met expectations, with business jets falling 25.9% year-on-year to 43 aircraft, and commercial rising 10.7% to 31 deliveries. The quarter's delivery total of 75 aircraft marked a 13.8% year-on-year decline.

The slump in aerospace's performance is reflected in Bombardier's company-wide results despite a buoyant performance at its rail-based Transportation division. Sales totaled $4.5 billion, a $300 million year-on-year drop, while EBIT fell from $324 million to $235 million. First quarter net income declined 31% to $158 million. Bombardier had $2.7 billion in cash on April 30.

Photo credit: Bombardier