Bombardier shares hit new low
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.