Bombardier scales back CSeries jet deliveries, improves
Send a link to a friend
[November 02, 2017]
By Allison Lampert
(Reuters) - Bombardier Inc scaled back
CSeries jet deliveries by around a third because of engine delays, but
reported improved earnings and a quarterly loss in line with analyst
The Canadian plane-and-train-maker also said it received a letter of
intent from a European customer for 31 firm CSeries orders, the plane
programís first order in about 18 months from an undisclosed European
European planemaker Airbus SE <AIR.PA> recently agreed to take a
majority stake in the CSeries program for $1, in a deal expected to
boost the plane's sales and reduce costs.
It's not clear whether the Airbus venture contributed to the preliminary
order, which would be valued at about $2.4 billion based on list prices,
with 30 additional options. Airline customers, however, benefit from
heavy discounts of around 50 percent on orders.
The Montreal-based company reported third-quarter earnings before
interest, taxes and special items (EBIT) that surged 90 percent to $165
million. It expects full-year EBIT of at least $630 million, which is at
the high end of its forecast of $580 million to $630 million.
Bombardier said it now expects to deliver about 20-22 CSeries narrowbody
jets, down from 30, in 2017 following engine delays by supplier Pratt &
Whitney, a division of United Technologies Corp <UTX.N>.
Bombardier said its free cash flow usage for 2017 would be about $1
billion, or at the higher end of its forecast range, because of the
[to top of second column]
The Bombardier logo is
seen at the Bombardier factory in Belfast, Northern Ireland
September 26, 2017. Picture taken September 26, 2017. REUTERS/Clodagh
Pratt & Whitney is expected to provide Bombardier with a supplier advance that
will help the planemaker's liquidity, starting in the fourth quarter. The
support, aimed at mitigating the cost of excess inventory generated by the
engine delays is subject to a preliminary deal to be finalized by year's end,
Revenue in the quarter was $3.8 billion, slightly up from $3.74 billion last
year, because of a stronger performance from the company's rail unit. The
company improved margins before special items in both its key business jet and
Bombardier, which is in the middle of a five-year turnaround plan after facing a
cash crunch in 2015, delivered 31 business jets in the third quarter ended Sept.
30, compared with 36 in the same period last year.
Bombardier posted a net loss of $117 million, or 5 cents a share, in the
quarter, compared to a loss of $94 million, or 4 cents per share, in the same
quarter last year.
The per-share loss matched analysts' average expectation, according to Thomson
(Reporting by Nivedita Bhattacharjee and Allison Lampert; Editing by Sai Sachin
Ravikumar and Bernadette Baum)
[© 2017 Thomson Reuters. All rights
Copyright 2017 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.