Even with a loss and lower revenue, the Canadian parent of Wichita’s Learjet turned in a pretty good financial quarter on Thursday.
Bombardier Inc. reported a $94 million loss on revenue of $3.7 billion in the third quarter of 2016. That compares with $4.1 billion in revenue and a $4.9 billion loss in the same period last year.
Most financial analysts shook off the loss, focusing instead on the company’s free cash flow.
Free cash flow “was solid,” wrote J.P. Morgan analyst Seth Seifman in an investor note Thursday, adding that it was about $200 million higher than his bank forecast for the quarter.
“Bombardier is making strides toward operational improvement goals, with solid margins in Transportation,” Seifman wrote. “Business Aircraft margins missed slightly, but performance this year, including Q3, is good amid fewer deliveries.”
Bombardier delivered 36 business jets during the three-month period ended Sept. 30, compared with 43 a year ago. Bombardier CEO Alain Bellemare said on a conference call Thursday morning with analysts that the company expects to exceed its guidance of 150 business jet deliveries in 2016.
It was “very good performance given the current market,” Bellemare said.
He told analysts Bombardier’s cost-cutting measures – including shedding thousands of jobs companywide and lowering business jet production rates – that began in 2015 and have continued this year are beginning to show results, especially in business aircraft.
“I feel very good about what (Bombardier Business Aircraft president) David (Coleal) and the team are doing, making significant adjustments,” Bellemare said. “I feel we’re at a good place right now.”
Bellemare said the company continues to closely watch Learjet and do some “fine tuning” in the marketplace to bolster sales of its Learjet 75, which is the only aircraft Learjet is currently actively producing at its plant on the west side of Wichita Eisenhower National Airport. Learjet, he said, “had a pretty good quarter in one of the toughest segments of business aircraft” with seven deliveries.
Bellemare also talked up the company’s newest and biggest business jet, the Global 7000, which less than a week ago had its first flight. He said the company remains on track for the 7000 to enter service in the second half of 2018, and its order book is strong.
“We’re pretty booked until 2020” on the Global 7000, he said.
Bombardier is also working through engine delays on its C Series airliner. Bellemare said Bombardier is working closely with Pratt & Whitney to eliminate delays in receiving the Geared Turbofan engines. He said Bombardier has “received assurances” from Pratt that it will be able to meet Bombardier’s C Series delivery schedule in 2017.