Bombardier posts lower revenue, profit

Bombardier Inc. saw lower revenue and profit in the second quarter of 2015, and said Thursday it would push back the entry of service date of its newest business jet.

The Canadian parent of Learjet said revenue for the quarter ended June 30 was $4.6 billion, compared with $4.9 billion in the same quarter a year ago. Net income was $125 million, down from $155 million in the second quarter of 2014.

The company delivered 47 business aircraft in the quarter, which was nine more than it delivered in the same period a year ago. Bombardier did not specify in that figure how the deliveries were split between its Wichita-built Learjet light business jets and its large cabin, long-range Challenger and Global aircraft.

Despite the higher deliveries, Bombardier CEO Alain Bellemare said the entry into service of the company’s Global 7000 business jet would be pushed back by nearly two years, to the second half of 2018. While the first Global 7000 test aircraft is in final assembly in Toronto, he attributed the delay largely to development of the aircraft’s wing.

Bombardier also continues to see softness in demand in China, Latin America and Russia for its Global and Challenger jets.

In May, Bombardier announced it would cut more than 1,750 employees in Canada and Northern Ireland as it reduced production of its Global 5000 and 6000 business jets, an action that Bellemare said Thursday was necessary because of the regional market softness that continues. The cuts came about four months after Bombardier suspended development of the Learjet 85 midsize business jet, which resulted in the layoff of 620 Learjet workers in Wichita and 380 others in Mexico, and a pretax charge of $1.4 billion.

“We are balancing supply and demand and protecting the value of the brand,” Bellemare said on a conference call with analysts Thursday morning.

Its business aircraft backlog stood at $22 billion at the end of the quarter.

Bellemare admitted on the call that much of the company’s focus in its aerospace division is on the CSeries passenger jet, which remains on track for first delivery of a CS100 to launch customer Swiss International Air Lines in the first half of 2016.

He said that even though the company hasn’t announced any new CSeries orders, including at last month’s Paris Air Show, it has 243 firm orders and options for more than 260 that it is working “aggressively” to convert.

“But these things take time,” Bellemare said.

“The order book is good. The number of options is good as well,” he said. “Airlines are re-engaging with us … so we will get orders.”

This story was originally published July 30, 2015 at 7:54 AM with the headline "Bombardier posts lower revenue, profit."