Bombardier says business jet demand picking up

BANGALORE (Reuters) – Bombardier Inc reported a 13 percent rise in first-quarter profit as demand for business jets begins to pick up, and said it had received more orders for its new C-Series commercial jetliners, slated to hit the market in 2013.

Business jet orders, which fell sharply in 2009 as companies cut spending and tighter credit made purchases difficult, are getting back on track with the global economic recovery.

Bombardier, the world’s No. 3 civil aircraft maker after Boeing and Airbus , forecast in March that it would deliver 150 business jets and 90 commercial aircraft in calendar 2011, an estimate based on an 11-month financial year.

The aerospace unit received firm orders worth $665 million for 10 C-Series jetliners from Sweden’s Braathens Aviation, taking the total number of firm orders for the C-Series aircraft to 100.

Investors had been waiting for news of further orders for the C-Series narrow-body commercial aircraft, which will compete with Boeing’s 737 and Airbus’ A320 aircraft.

Bombardier said Braathens Leasing Ltd, a member of Braathens Aviation of Sweden, has placed a firm order for five CS100 and five CS300 mainline jetliners.

Braathens also took options on an additional 10 C-Series aircraft and if those are converted to firm orders, the deal value could go up to about $1.37 billion, Bombardier Aerospace said in a statement.

Braathens Aviation is controlled by Swedish investment firm Braganza AS.

Bombardier, which so far had 90 firm orders for the 110- to 145-seat planes, had not announced a C-Series order since February 2010. Hopes are high it will garner some at the Paris Air Show in June.


Bombardier, which is also the world’s largest train maker, reported net profit of $220 million, or 12 cents a share, compared with $195 million, or 11 cents a share, a year ago.

Analysts, on average, had expected earnings of 10 cents a share, according to Thomson Reuters I/B/E/S.

Revenue rose 9 percent to $4.66 billion.

Overall backlog was $55.1 billion as of April 30, compared with $52.7 billion on January 31, Bombardier said in a statement on Wednesday.

“Our commercial aircraft segment, although slower to recover, is seeing an improved level of interest from customers,” said Chief Executive Pierre Beaudoin.

Revenue at the aerospace segment rose 10 percent to $2.2 billion. The aerospace segment received 86 net orders during the quarter, up from 61 in the year-ago period.

Bombardier’s aerospace unit got a major lift in March from a massive order of up to 120 business jets from Warren Buffett’s NetJets Inc, a deal that could be worth as much as $6.

The transportation segment’s revenue was up 9 percent at $2.5 billion.

Bombardier said free cash flow usage totaled $409 million in the first quarter, which is typically a seasonally weak quarter for the Montreal-based company. That compared with a usage of $217 million last year.

Shares of Montreal-based Bombardier closed at C$6.75 on Tuesday on the Toronto Stock Exchange.