Bombardier’s quarterly profit exceeds expectations due to high demand for business jets.

Bombardier's quarterly profit exceeds expectations due to high demand for business jets.

Bombardier Inc. Reports Impressive Quarterly Profit and Revenue Growth

Montreal, Aug 3 (ANBLE) – Bombardier Inc., the leading business jet maker based in Montreal, has announced its second-quarter financial results that exceeded expectations. Despite experiencing supply chain pressures, the company reported a profit of $10 million from continuing operations, compared to a loss of $109 million in the same period last year. This impressive performance can be attributed to the sustained demand for private flying and maintenance of aircraft.

Over the past few quarters, corporate jet makers have witnessed strong demand from wealthy individuals seeking the exclusivity and convenience of private flying. This trend has significantly boosted the profitability of Bombardier and its competitors. However, the industry is currently grappling with supply chain challenges, making it more difficult to meet the demand for new aircraft deliveries.

During a recent analyst call, Bombardier’s CEO, Eric Martel, acknowledged the existence of “pressure points” in the supply chain, particularly among smaller suppliers. Nevertheless, he expressed optimism that improvements are being made and emphasized the continued focus on addressing this issue in the coming quarters.

These challenges faced by Bombardier are not unique, as Textron Inc., the parent company of Gulfstream jet maker, also experienced supply chain issues. Nonetheless, this did not deter Textron from raising its full-year profit forecast due to strong demand and higher jet pricing in the market.

Bombardier’s aftermarket revenue, derived from servicing planes, recorded a significant growth of 19% compared to the previous year, contributing to the overall profitability of the company. This demonstrates the consistent demand for maintenance services, which is an essential aspect of the business.

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However, there are indications that demand for new aircraft may be reaching a plateau. Bombardier disclosed that the backlog of orders at the end of June only increased by 0.7% from the end of March, amounting to $14.9 billion. This stagnant backlog suggests a potential slowdown in new orders, which needs to be closely monitored by the company.

Despite this possible slowdown in demand, Bombardier managed to achieve an impressive adjusted profit of 72 cents per share for the second quarter, compared to a loss of 48 cents per share in the same period last year. This performance exceeded analysts’ expectations of 28 cents per share.

Bombardier’s revenue also experienced a significant increase of 8% to $1.68 billion, aligning with market expectations. This growth can be attributed to the robust demand for their products and services.

In terms of financials, Bombardier reported a cash burn of $222 million in the second quarter, primarily attributed to capital expenditures and the need to build up working capital. This will support the higher jet deliveries anticipated in the second half of 2023.

Despite the challenges faced, Bombardier remains confident in achieving its corporate goals. The company aims to deliver at least 138 jets this year and is on track to fulfill its 2025 targets, which include delivering 150 jets to customers.

In conclusion, Bombardier Inc. has demonstrated strong financial performance in the second quarter of this year, surpassing expectations despite facing supply chain pressures. With sustained demand for private flying and aircraft maintenance, the company is well-positioned to overcome these challenges. Bombardier’s focus on continuous improvement in the supply chain and commitment to meeting customers’ demands will be key to sustaining its growth in the future.

A complete video version of the article can be found here.

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