Bombardier says C Series shift to Airbus allows it to focus on regional planes
With its focus no longer diverted by the aircraft formerly known as the C Series, Bombardier Inc. says it is working to improve the profitability of its regional jets and turboprops by boosting sales and cutting costs.
The Montreal-based transportation giant’s regional aircraft order backlog rose to 116 planes, enough for three years of production that sets it up for the potential to increase production rates. Its commercial aircraft segment won orders for a total of 16 Q400 aircraft and 35 CRJ Series equipped with its new cabin design.
Bombardier’s shares increased nearly five per cent at $4.99 in Thursday trading after the company posted strong results and signalled that its turnaround plan remains on track. Bombardier, which reports in U.S. dollars, said overall revenues increased three per cent to $4.26 billion in the second quarter.
Most of the improvement was due to an 11 per cent increase in revenue at Bombardier Transportation, which accounted for $2.26 billion of the total. Revenue fell at Bombardier’s commercial aircraft and business aircraft divisions.
The company achieved a second-quarter profit of $70 million as it posted a $232 million increase free cash flow, helped by $600 million net proceeds from the sale of Downsview airport in Toronto.
Net income was equal to two cents per share and compared with a year-earlier loss of $243 million or 11 cents per share.
On an adjusted basis, Bombardier earned $87 mil- lion or three cents per share.
Analysts had estimated one cent per share of net income and an adjusted loss of one cent per share, according to Thomson Reuters Eikon. Bombardier concluded a number of key strategic actions in the quarter, including closing a partnership deal with European giant Airbus.
Under the partnership, the European aircraft manufacturer acquired a majority 50.01 per cent stake in the C Series commercial jet program effective July 1.
Airbus has since renamed the two models of C Series passenger jets to the A220-100 and A220-300.
© 2018 The Canadian Press