Bombardier reports Q1 2017 results

Bombardier reports Q1 2017 results

Full-year guidance reaffirmed; Business Aircraft unit adds 3rd Global 7000 to test fleet.

Industry/Regulations

Global 7000 flight test vehicle 3 (FTV3), dubbed “The Navigator,” will be used to test the aircraft’s advanced avionics and electrical system performance. In five months of testing, the Global 7000 aircraft set a record as the largest business jet to operate so close to the sound barrier, reaching a top speed of Mach 0.995.

Bombardier Inc. officials reported the company’s first quarter (Q1) 2017 results on May 11, 2017, in Montréal.

The company posted revenues of $3.6 billion and earnings before interest and taxes (EBIT) before special items was $128 million. EBIT margins before special items grew to 8.0% in its train equipment Transportation unit, 7.6% at Business Aircraft and 7.5% at Aerostructures and Engineering, while Commercial Aircraft recorded an EBIT loss in line with the prior year (10.4%). Free cash flow usage improved by $157 million to $593 million for the quarter.

“We continue to gain momentum as we execute our transformation plan and begin to unleash the full value of the Bombardier portfolio,” Alain Bellemare, president and chief executive officer, Bombardier Inc. said in a press release.

Pierre Beaudoin intends to step down as executive chairman of the board effective June 30, 2017, and will continue to serve as non-executive chairman.

Bombardier continued to invest in the Global 7000 and Global 8000 aircraft program testing and certification phase as well as inventories supporting the production ramp-up of the C Series aircraft program and certain Transportation projects. These results lead Bombardier to reiterate its full year guidance of revenue growth in the low-single digits, excluding currency impacts, EBIT before special items between $530 million and $630 million and free cash flow usage between $1.0 billion and $750 million.

Business Aircraft deliveries and revenues for the first quarter achieved in excess of 20% [29] of full year guidance of 135 deliveries. Development of the Global 7000 and Global 8000 aircraft program continued, with the third flight test vehicle (FTV) joining the flight test program (shown above). The Global 7000 aircraft is expected to enter into service in the second half of 2018.

For Commercial Aircraft, 10 C Series aircraft are now in service with Swiss International Air Lines (SWISS) and Air Baltic Corporation AS (airBaltic), and the company ramped-up C Series aircraft production in the first quarter in preparation for an acceleration of deliveries in the second half of 2017. Fifteen units were delivered in Q1 2017, and the C Seris aircraft backlog stands at 432 units. Transport Canada and the European Aviation Safety Agency awarded the CS100 aircraft its steep approach certifications, allowing the aircraft to operate at challenging airports such as London City Airport.

During the quarter, orders for 10 CRJ900 aircraft came from CityJet, increasing its CRJ Series fleet to 22 aircraft. Based on list price, the firm orders are valued at $467 million.

Aerostructures and Engineering had an external backlog of $38 million at the end of Q1 2107, down slightly from $42 million in the last quarter of 2016.

All 15 candidates in the Management Proxy Circular dated March 14, 2017 were elected as directors of Bombardier Inc. during its annual meeting of shareholders.