Bom­bardier shares hit new low

The Guardian (Charlottetown) - - BUSINESS - THE CANA­DIAN PRESS

Bom­bardier's stock hit a new 22-year low Fri­day amid re­ports that its new Global 7000-8000 busi­ness jet may be de­layed and er­ro­neous con­cerns that a ma­jor Chi­nese air­line has turned to Boe­ing in­stead of the Mon­treal com­pany's CSeries.

The shares hit a low of $1.84 in early trad­ing, but were down just one cent in early af­ter­noon trad­ing on the Toronto Stock Ex­change.

That fol­lowed a more than 10 per cent dip on Thurs­day.

The last time Bom­bardier's shares (TSX:BBD.B) plunged so low was in 1993.

Thurs­day's sell­off fol­lowed a Bloomberg re­port that cited a com­pany of­fi­cial who said Bom­bardier's new lead­er­ship team is con­duct­ing “a full re­view of all as­pects of the pro­gram, in­clud­ing its sched­ule” for its new Global air­craft.

David Ty­er­man of Canac­cord Ge­nu­ity said such a de­lay should not come as a sur­prise given that Bom­bardier hasn't pro­vided an up­date on the de­vel­op­ment of the Global 7000 and 8000, in­clud­ing the date for first flight.

The an­a­lyst said he's as­sum­ing the plane will be two years late and be de­liv­ered in 2018 and 2019. Ty­er­man also said in­vestors might have some con­cern about the im­pact of eco­nomic prob­lems in China and Greece. Asia Pa­cific and Europe are two big ar­eas of busi­ness for Bom­bardier's rail and aerospace di­vi­sions.

The rail busi­ness is largely de­pen­dent on or­ders from gov­ern­ment, which of­ten spends more dur­ing eco­nomic slow­downs. In aerospace, the re­gions ac­count for about 18 per cent of the US$20 bil­lion in an­nual rev­enues.

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