Bom­bardier strength­ens its bal­ance sheet

CEO con­fi­dent it can de­liver on its com­mit­ments

The Hamilton Spectator - - BUSINESS - ROSS MAROW­ITS

MON­TREAL — Bom­bardier says it has strength­ened its bal­ance sheet and is on track to turn its fi­nances around, nearly two years af­ter it teetered on the verge of bank­ruptcy.

The man­u­fac­turer of air­craft and trains, which keeps its books in U.S. dol­lars, said Fri­day it lost $296 mil­lion or 13 cents per share in its se­cond quar­ter, an im­prove­ment from its loss of $490 mil­lion or 24 cents per share in the same pe­riod a year ago.

In ad­justed prof­its, it earned $39 mil­lion or two cents per share, its high­est in two years.

“We had a very strong first half of the year,” CEO Alain Belle­mare said in a con­fer­ence call. “We’re con­fi­dent we will be able to de­liver on all of our com­mit­ments.”

Rev­enue for the quar­ter ended June 30 slipped to $4.09 bil­lion from nearly $4.31 bil­lion a year ago as a re­sult of lower pro­duc­tion of busi­ness air­craft.

Shares in Bom­bardier in­creased by 6.2 per cent, gain­ing 15 cents at C$2.56 in mid­day trad­ing on the Toronto Stock Ex­change.

The re­sults, which beat an­a­lyst ex­pec­ta­tions, came as the com­pany said it ex­pects to hit the high end of its full-year guid­ance, which is now be­tween $580 mil­lion and $630 mil­lion in earn­ings be­fore in­ter­est and taxes.

Bom­bardier has im­ple­mented a cost-cut­ting plan that has re­sulted in thou­sands of lay­offs around the world. It has also se­cured fund­ing from the fed­eral and Que­bec gov­ern­ments, as well as an in­vest­ment from Que­bec’s pen­sion fund man­ager, for its CSeries jet pro­gram.

Dur­ing the quar­ter, Bom­bardier de­liv­ered six CSeries planes, rais­ing the to­tal num­ber in ser­vice to 16. It ex­pects to ship about 30 of the air­craft for the year.

Belle­mare said CSeries sales have been held back. He said that’s be­cause air­lines are ex­am­in­ing how the 100- to 150-seat planes can be used on routes that best ac­com­mo­date that num­ber of pas­sen­gers ver­sus smaller re­gional jets or larger Boe­ing 737s or Air­bus A320s.

The earn­ings come as Bom­bardier is in a trade dis­pute with Boe­ing. The Chicago-based ri­val has pe­ti­tioned the U.S. In­ter­na­tional Trade Com­mis­sion al­leg­ing that the Mon­treal com­pany has been sell­ing CSeries planes in the U.S. be­low cost be­cause of sub­si­dies that vi­o­late trade rules. Bom­bardier has de­nied the ac­cu­sa­tions.

If Boe­ing is suc­cess­ful, that would have a “ma­te­rial ad­verse im­pact” on the CSeries pro­gram, Bom­bardier warned.

FRAN­COIS MORI, THE AS­SO­CI­ATED PRESS FILE PHOTO

Bom­bardier, maker of the CS300, says it had a strong first half of the year.

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