Bombardier fiscal second-quarter profit drops 27%

Bombardier reported net income of $148 million for its fiscal second quarter ended July 31, down 26.7% from a $202 million profit in the year-ago period, saying its Aerospace unit "continued to be impacted" by the global financial downturn.

President and CEO Pierre Beaudoin said, "The uncertain economic environment continues to be reflected in Aerospace's financial results. However, the group is starting to see signs of recovery…Overall, our long-term prospects are strong." Aerospace's quarterly EBIT dropped 40.9% year-over-year to $91 million compared to $154 million last year as the unit's revenue decreased 18.2% to $1.96 billion.

"We've got orders coming in, but not big ones," Bombardier Aerospace President and COO Guy Hachey told reporters and analysts, citing several recent Q400 orders (ATW Daily News, Aug. 31). He defended the progress of the CSeries program despite Bombardier announcing no orders at this summer's Farnborough Airshow. He noted the aircraft is still 42 months from EIS with Lufthansa.

"We are feeling that we're in good position with the program at this time," he said. "Many of our [potential] customers are saying, 'There's no rush' [to place an order]." He claimed the manufacturer is in "quite advanced" talks with "four or five" potential CSeries buyers.

Beaudoin added that "all of our analysis" shows that a re-engined 737/A320 (ATW Daily News, Sept. 1) would generate just "one-third of [the fuel burn improvement] we're able to do with [the PW1000G engine] on a fully optimized aircraft." Bombardier and Pratt & Whitney are projecting a 16% fuel efficiency gain for the CSeries compared to current narrowbodies.

Bombardier said CRJ1000 flight testing is 95% complete. "The full range of speed, altitude, weight and balance has been completed with final certification activities in progress," it stated, adding that first deliveries are on track for the second half of this year.

It delivered 18 commercial aircraft in the fiscal second quarter comprising six CRJ700s and 12 Q400s. It delivered 28 commercial aircraft in the year-ago quarter. Fiscal-year deliveries stood at 34 commercial aircraft as of July 31, 42.4% behind 59 deliveries through the first half of its prior fiscal year. "The lower delivery of regional aircraft during the six-month period…is consistent with the continued difficult environment of the airline industry," Bombardier said.

Overall fiscal second-quarter revenue declined 17.5% to $4.08 billion while expenses decreased 17.9% to $3.41 billion. EBITDA lowered 24.1% to $331 million from $436 million in the prior-year quarter.

Photo: Bombardier President and CEO Pierre Beaudoin. Courtesy, Bombardier.