Despite economic uncertainty and turbulence among its competitors, Bombardier exceeded analysts’ expectations in its most recent quarter thanks to strong demand for its business jets.
Its big boss, Éric Martel, even predicts that activities will take off even higher. It promises an increase in deliveries during the last three months of the financial year and in 2024, while aiming for a stable order book. The executive stressed on Thursday that conditions remained favorable for fleet operators. This segment is experiencing a resurgence in popularity among wealthy travelers because it offers superior privacy. “We continue to see a market that is still very active. »
While this vigorous demand stabilizes, the defense sector could provide reinforcement to ensure the maintenance of the order book, mentioned Mr. Martel. “We started putting efforts into the defense sector about two years ago, and our defense activities are going very well. »
“These are also projects that take a long time to bring to fruition,” he added. We have to go through calls for tender. So, these are not things that can be resolved in a few days. These are things that take months, years. We anticipate, next year, to see orders that we will start to generate in this area. »
Bombardier delivered 31 aircraft during the months of July, August and September, therefore 82 aircraft in the first nine months of the year. The company still plans to achieve its target of 138 deliveries this year, which implies a significant acceleration in the delivery rate.
Mr. Martel assured that Bombardier was in a good position to achieve this objective, at a time when its competitors are experiencing difficulties due to supply chain disruptions. He attributed the company’s success to purchasing parts and equipment in advance and bringing some operations in-house. “We had to have all the parts and equipment that came to us from the supply chain. So, we are in an excellent position. »
In a difficult logistical context, Bombardier managed to deliver one more aircraft than analysts’ consensus forecasts, underlined analyst Benoit Poirier of Desjardins Capital Markets. “Bombardier is the only aircraft manufacturer that has exceeded delivery expectations. »
The value of the company’s backlog decreased slightly from US$14.9 billion to US$14.7 billion. However, the ratio of new orders to deliveries is 1.1. Bombardier wants to maintain this ratio at at least 1.0, a threshold which would indicate that the company delivers as many aircraft as it receives orders. “The market may be concerned about the slight decline in the order book, but industry conditions remain healthy and orders already secured will support profitability and improved cash flow in the coming years,” explained National Bank Financial analyst Cameron Doerksen.
Bombardier generated US$80 million in cash flow, a metric closely watched by investors as the company attempts to reduce its debt. The company has US$1.2 billion in available cash.
Bombardier revealed results above expectations, despite a net loss of US$37 million. Adjusted earnings per share came in at 73 cents. Revenues, for their part, were up 28%, to stand at US$1.9 billion. Before the results were released, analysts expected earnings per share of 46 cents and revenue of US$1.75 billion, according to financial data firm Refinitiv.
