Bombardier Takes Positive Look At Tough Times

 - June 4, 2009, 12:30 PM

Bombardier Aerospace released its first-quarter results yesterday, reporting a net profit of $158 million for the quarter ending April 20, down from $229 million for the same quarter last year. Overall revenue slipped to $4.5 billion from $4.8 billion. Bombardier CEO Pierre Beaudoin attributes the drop primarily to the economic slump, which has led to cancellations and delivery deferrals and a 25-percent reduction in business jet deliveries for the first quarter. While the company described the backlog as “relatively robust,” the company has 25 “white tails” for which contracts are not yet finalized. Beaudoin also noted an inventory of 35 used aircraft that the company is attempting to sell “as is.” While anxious to reduce that inventory, Bombardier is nevertheless mindful of pricing. “We’ve moved quite a few aircraft, but we’re not giving them away.” The production rate is likely to stabilize and remain flat next year, based on current order expectations. But Bombardier has not ruled out an additional production cut if the economy worsens. However, Beaudoin concluded, “Bombardier’s financial situation is far healthier than it was at the time of the last economic slowdown.”