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Bombardier beats earnings estimates on rail strength; shares jump

Reuters 

By Allison and Bhattacharjee

(Reuters) - reported quarterly results on Thursday that beat expectations thanks to its rail division, sending shares surging, and said a favourable decision by a U. S. trade agency gave it flexibility to deliver CSeries jets to this year.

The on Wednesday said it rejected hefty U.

S. duties on the CSeries jets partly because lost no sales or revenue when Delta ordered the aircraft in 2016 from the Canadian plane-and-trainmaker.

During a call with analysts, called the ITC's reasoning "good news" and said "it gives us the flexibility to ship the aircraft out of Mirabel (Quebec) to Delta" in 2018.

Bellemare said still plans to set up a U. S. assembly line for the CSeries after a deal giving a majority stake in the jet programme to SE closes in 2018.

said it expects revenue to grow to $17.0 billion to $17.5 billion in 2018. It is also targeting revenue of more than $20 billion by 2020.

Shares surged around 9 percent in morning trading.

The plane-and-train-maker is in the middle of a five-year turnaround plan to cut costs and boost margins, after years of heavy investments in two new aircraft programs pushed it to the brink of bankruptcy in 2015.

GAINING MOMENTUM

Bellemare said momentum was increasing for the company's business jets and it was prepared to increase production volume if the market supports it.

said in a note to clients was "well positioned to achieve cash flow breakeven in 2018," after coming in ahead of its 2017 forecast for cash flow.

Revenue at its transportation unit, which includes rail, surged 28 percent to $2.49 billion during the quarter.

The company reported $304 million in earnings before interest, taxation, depreciation and amortisation (EBITDA) for the fourth quarter, compared with $203 million a year earlier.

On an adjusted basis, the company made 2 cents per share, while analysts expected it to break even, according to I/B/E/S.

Revenue grew 8 percent to $4.72 billion and EBITDA margin before special items rose to 6.4 percent from 4.6 percent.

(Reporting by Allison in Toronto and Bhattacharjee in Bangalore; Editing by and Bernadette Baum)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, February 15 2018. 21:08 IST
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