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Monday, June 9, 2008

BBD Releases Q1 Profits

Bombardier released strong financial results for the first quarter ended April 30, 2008. Revenues increased by 21 percent to reach $4.8 billion. Earnings before financing income, financing expense and income taxes (EBIT) totaled $321 million, compared to $183 million last fiscal year ($252 million last fiscal year before an excess-over-average production cost (EOAPC) charge of $69 million). EBIT margin at 6.7 percent compares to last year's 4.6 percent, or 6.4 percent before EOAPC.
Net income reached $226 million, an improvement of $147 million compared to the same period last year. Diluted earnings per share (EPS) increased to $0.12, compared to $0.04 last fiscal year. The overall backlog climbed to $55.5 billion, compared to $53.6 billion on January 31, 2008.
Free cash flow (cash flows from operating activities less net additions to property, plant and equipment) improved by $714 million to reach $560 million. The cash position stands strong at $4.3 billion as at April 30, 2008 compared to $3.6 billion on January 31, 2008.
"Our first quarter results have shown marked improvement in all areas,” said Chair Laurent Beaudoin. “The delivery on our large order intake of the past few years is fuelling the increase in revenues, and this, together with our rigorous discipline in reducing costs, has translated into a strong $0.12 earnings per share compared to $0.04 last year. Combined with our continued focus on cash generation, we have a solid foundation upon which to build for the coming year. Therefore, we are pleased to announce the reinstatement of a $0.025 quarterly dividend per common share."
As previously announced on November, Pierre Beaudoin assumed the position of president and chief executive officer of Bombardier Inc. Laurent Beaudoin remains chair.

Bombardier Aerospace
At Bombardier Aerospace, revenues increased by 5% totaling $2.4 billion, while EBIT improved by $94 million to reach $206 million. This translates into an EBIT margin of 8.7 percent for the first quarter ended April 30, 2008. Free cash flow improved by $224 million totaling $290 million. Bombardier Aerospace posted a six percent increase in its backlog, which reached another record level at $24.1 billion.
In the business aircraft market, the latest General Aviation Manufacturers Association (GAMA) report confirms that Bombardier Aerospace continues to be the industry leader in terms of revenues. The group recorded 58 deliveries and 60 net orders for the quarter. Subsequent to the first quarter, Bombardier Aerospace received a significant order from VistaJet of Switzerland for 35 business jets with options for 25 additional aircraft, bringing the total value, including options, to approximately $1.2 billion. The order intake of the past months is another illustration of the strength of our state-of-the art business jet product offering.
The book-to-bill ratio for commercial aircraft orders came in strong at 2.1 for the quarter, including an order from Scandinavian Airlines Systems (SAS) and its affiliates for 27 regional jets and turboprops. Deliveries remained stable across all our product offering. As a further reflection of the unabated popularity of our regional jet family of aircraft, the CRJ Series attained a major milestone with the delivery of the 1500th aircraft during the quarter.
Bombardier Aerospace's revenues amounted to $2.4 billion for the three-month period ended April 30, 2008, compared to $2.3 billion for the same period the previous year. The $120-million increase is mainly due to a 9 percent increase in manufacturing revenues reflecting increased deliveries and an 18 percent increase of service revenues; partially offset by a lower level of revenues from the sale of pre-owned aircraft.
For the first quarter ended April 30, 2008, EBIT reached $206 million, or 8.7 percent of revenues, compared to $112 million, or five percent for the same period the previous year ($181 million, or eight percent before an EOAPC charge, as a result of a change in accounting policy for aerospace programs from the average cost method to the unit cost method, in accordance with new Accounting Standards Board (AcSB) rules adopted by Bombardier, effective February 1, 2008). The 3.7 percentage-point increase is mainly due to an EOAPC charge of nil for the three-month period ended April 30, 2008, compared to a net charge of $69 million for the same period last fiscal year as a result of the accounting change, and improved selling prices for both business and commercial aircraft; partially offset by the negative impact of the strengthening of the Canadian dollar versus the U.S. dollar as well as the higher cost of materials due to price escalations.
Free cash flow totalled $290 million for the first quarter ended April 30, 2008, compared to $66 million for the same period last fiscal year. The $224-million increase is mainly due to a positive period-over-period variation in net change in non-cash balances related to operations and higher profitability; partially offset by higher net additions to property, plant and equipment.
For the quarter ended April 30, 2008, aircraft deliveries totalled 87, compared to 78 for the same period the previous year. The 87 deliveries consisted of 58 business aircraft, 28 commercial aircraft and one amphibious aircraft (50 business and 28 commercial aircraft for the corresponding period last fiscal year).
Aerospace received 118 net orders during the quarter ended April 30, 2008, compared to 174 during the corresponding period the previous year. The 118 orders consisted of 60 business aircraft and 58 commercial aircraft (83 business and 91 commercial aircraft for the corresponding period last fiscal year). Major orders came from SAS Scandinavian Airlines and three of its affiliates for 27 regional jets and turboprops for a value of approximately $883 million and from the Government of Iraq for ten CRJ900 NextGen aircraft valued at approximately $398 million.
Aerospace's firm order backlog reached $ 24.1 billion as at April 30, 2008, compared to $22.7 billion as at January 31, 2008. The six percent increase reflects a strong order intake in both commercial and business aircraft.
Consolidated revenues totaled $4.8 billion for the first quarter ended April 30, compared to $4 billion for the same period last year. For the first quarter, EBIT reached $321 million, or 6.7 percent of revenues, compared to $183 million, or 4.6 percent, for the same period the previous year.
It dropped its net financing expense by $48 million to $21 million for the first quarter of fiscal year 2009, resulting from higher interest income on cash and cash equivalents, lower interest expense on long-term debt and a net gain on financial instruments; partially offset by lower financing income on loans and lease receivables.
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