Bombardier Inc., the Canadian multinational aerospace and transportation company, posted strong third quarter earnings on Thursday as deliveries of aircraft jumped almost 60% compared to Q3 2013.
Seventy-one airplanes were delivered in the third quarter 2014, compared to 45 in the same quarter last year.
Earnings in its Aerospace unit, before interest and taxes, jumped from $86 million in Q3 2013 to $137 million in Q3 2014.
The Montreal-based company is on the verge of becoming a serious rival for commercial jet makers. Test flights are underway on its CSeries program, which has been fraught with delays and escalating costs.
Cash and equivalents on September 30th stood at $1.9 billion, compared to $3.4 billion on the same date last year.
In the third quarter, the company received 76 orders in its Aerospace division, which was nearly triple last year quarter’s 26 airplanes. Macquarie AirFinance placed a firm order for 40 CSeries aircraft, which helped boost figures for the quarter.
Test flights on the CSeries airplane resumed in September, much to the relief of investors. A stationary test in May put a stop to all flights. The company expects the CSeries to go into service late in 2015.
Bombardier announced it was shelving its plan to build an assembly factory in Russia. It cited geopolitical tensions and the current state of Russia’s economy.
(Source: Bombardier Inc. Financial Highlights)
President and Chief Executive Officer, Pierre Beaudoin, said:
“During the third quarter, we saw good momentum at Aerospace with improvement on all fronts. The CSeries flight test program resumed in September and is progressing well. Transportation also had good results in the quarter. Its backlog continued to increase with several small and medium orders won across various regions and product segments, thus maintaining its leading position in the rail industry.”
After Lufthansa said its Swiss International unit would not be the debut flier for the CSeries jet, Bombardier has been seeking out another airline. It says it is in talks with a company.
Swiss, which ordered 30 CSeries jets, expects deliveries to start in the second half of next year.
Bombardier’s Transport division posted revenue of $2.33 billion, an increase of 13% compared to Q3 2013.
Total revenue grew by almost 21% to $4.91 billion. Net income declined to $74 million (3 cents per share), which was nearly 50% lower than Q3 2013’s $147 million (8 cents per share). In the third quarter Bombardier took a charge of $120 million related to 2,000 job cuts in its aerospace and 900 in its transportation divisions.
Mr. Beaudoin said the major restructuring plan, which was announced in July, has been deployed at Aerospace, while Transportation continued to execute OneBT “setting the right conditions to continue on our path to profitable growth.”
He claims the company’s lighter structure will result in lower costs and greater agility.
Bombardier has an order backlog of $72.4 billion.
