Bombardier delivered 26 business jets in the first quarter, on par with a year earlier, but revenues are expected to come in 18 percent higher, according to the company’s preliminary results.
Providing a peek at its anticipated results slated for release on Thursday, Bombardier reported that it expects its business jet revenues to be $1.3 billion, well ahead of what financial data aggregator Seeking Alpha said were analyst consensus estimates of $1.18 billion. Further, earnings appear to have outpaced expectations, with an EBITDA from continuing operations of $123 million. Seeking Alpha reported a consensus EBITDA estimate of $89 million.
“The preliminary financial results we are sharing today validate the actions we have taken to reposition our business and reflect the progress we are making on our strategic priorities,” said Bombardier president and CEO Éric Martel. “The first quarter was a strong start to the year, with our cost-reduction initiatives beginning to contribute to the bottom line, continued progress of our Global 7500 learning curve, and robust demand supporting significant year-over-year margin expansion.”
Bombardier believes it remains on track to deliver between 110 and 120 business jets this year, which keeps unit shipments at about the same level as in 2020 when it delivered 114.
However, the company noted that it received a letter from a holder of debt that matures in 2034 alleging that Bombardier’s sales of its transportation, regional jet, and aerostructures businesses were in breach of the loan covenants. The airframer stressed that it believes the allegations are without merit and that the sales “enabled it to reposition the business, strengthen its balance sheet, accelerate de-leveraging, and better position Bombardier for long-term growth and value creation.”
Even so, the company has decided to launch a consent solicitation with its outstanding senior notes or debentures to “clarify that the transactions are permitted by the applicable indenture and do not and will not give rise to any defaults, events of default, or change of control under the applicable indenture.” Bombardier said it is taking this step in consultation with outside advisors, adding that this will be “the most expedient and efficient path to maintain value and protect the corporation and its stakeholders.”
The sales of its non-business jet businesses were among several aggressive steps the corporation has taken to grapple with a heavy debt load that became even larger as the pandemic took a toll on operations last year.
Bombardier also is discontinuing Learjet production, realigning facilities, and reducing its global workforce to about 13,000 by year-end. In addition, the company made a strategic decision to keep down capital expenses for new aircraft programs over the next several years.