(c) 2013, Bloomberg News.
(c) 2013, Bloomberg News.
MONTREAL — Bombardier reported third- quarter profit that missed analysts' expectations as the company delivered fewer planes and revenue declined.
Earnings excluding some costs and gains fell to $165 million, or 9 cents a share, from $173 million, or 9 cents, a year earlier, Montreal-based Bombardier said Thursday in a statement. That missed the 10-cent average of 21 estimates compiled by Bloomberg. Revenue dropped to $4.06 billion from $4.21 billion, short of the $4.56 billion average estimate.
Bombardier, the world's third-largest aircraft maker, is striving to ready its biggest plane ever, the CSeries jetliner, for entry into service next year after delaying first flight three times. The company said Thursday it's evaluating the flight test program's timeline and the overall CSeries schedule, and will provide an update "in the coming months."
Bombardier is still 123 firm orders short of a target of 300 by the time the CSeries enters service. "Many" sales discussions have advanced since the plane completed its first flight Sept. 16, Philippe Poutissou, a vice president of marketing at Bombardier's commercial aircraft unit, told Bloomberg News two weeks ago.
"Investors are clearly shifting attention to the CSeries order book," Walter Spracklin, an analyst at RBC Capital Markets in Toronto who advises investors to buy the stock, said in a note to clients published Wednesday. "Should Bombardier announce new CSeries orders in the next few months, and we believe they will, it will act as a significant positive catalyst" for the stock.
Chief Executive Officer Pierre Beaudoin has said he expects the CSeries to be a key contributor in almost doubling annual revenue in the next decade, garnering $5 billion to $8 billion a year. Bombardier last month raised the CSeries program cost estimate by about 15 percent to $3.9 billion.
Bombardier delivered 45 planes in the third quarter, 12 fewer than a year earlier. This year's quarterly total included 36 business jets, such as the Global 5000 and the Challenger 300, and nine commercial aircraft, such as the Q400 turboprop. New plane orders dropped to 26 in the period from 83 a year earlier, the company also said.
"The low order intake and overall market conditions were a disappointment," Beaudoin said.
Aircraft deliveries in 2013 will probably increase to 245 from last year's 233, the company said Feb. 21. The target comprises 190 business jets and 55 regional planes, Bombardier said.
Earnings before interest and taxes at the aerospace unit amounted to 4.3 percent of revenue in the quarter, compared with 6 percent for the train unit, Bombardier said.
Bombardier used $522 million of free cash flow in the quarter, more than double the $187 million it used a year earlier. Most of the spending, or $406 million, occurred in the aerospace unit, while the trainmaking unit used $5 million and the company paid $111 million in interest and taxes.
The company is investing about $2 billion in new aircraft programs for the second straight year in 2013 and predicted in March that the figure will drop to $1 billion in 2015. Along with the CSeries, Bombardier is developing planes such as the Learjet 85, Global 7000 and Global 8000 business aircraft.
Bombardier had available short-term capital resources of $4 billion as of Sept. 30, including $2.6 billion in cash and equivalents. The amounts are little changed from Dec. 31.
The company's backlog climbed to $65.5 billion at the end of September from $64.9 billion at the end of last year.