Canadian plane and train maker Bombardier Inc on Thursday reported lower-than-expected revenue and earnings per share, driving down the stock as much as 5 percent in morning trading.
The company, which last week secured a C$372.5 million ($285.4 million) Canadian government loan for its CSeries planes and Global 7000 business jets, beat expectations on operating profit, while improving margins and free cash flow use.
Montreal-headquartered Bombardier reaffirmed its 2017 forecasts, including for low-single-digit revenue growth.
In a note to clients, Citi analyst Stephen Trent suggested "a tug of war between strong guidance and the EPS miss could ensue."
Chief Financial Officer John Di Bert told analysts the company would deliver 30 to 35 of its CSeries narrowbody planes in 2017, although deliveries would be skewed toward the second half of the year.
The company is in the middle of a five-year turnaround plan to improve its financial performance after facing a cash crunch in 2015.
"With the transition year behind us we are now fully focused on resuming growth and building earnings," Chief Executive Alain Bellemare told analysts during a conference call.
The company said revenue in the business aircraft division, which makes the Learjet, Global and Challenger business jets, fell 20.9 percent to $1.65 billion in the fourth quarter.
In mid-morning trading, shares were down 2.7 percent at C$2.51.
'AHEAD OF GUIDANCE'
Bombardier reported adjusted fourth-quarter earnings before interest and taxes (EBIT) of $104 million, excluding special items, compared with consensus estimates for $83 million, RBC analyst Walter Spracklin wrote in a note. Cash generation in the quarter was also better than expected at $496 million, compared with an expected $280 million, Spracklin said.
"The full-year 2016 results ... ended the year coming in ahead of management guidance," he wrote.
Bombardier delivered 163 business jets in 2016, down 36 from a year earlier.
The company did not report any new CSeries orders, which could be seen "as a disappointment by some investors" following speculation of a sale in certain media reports over the last few days, Desjardins analyst Benoit Poirier wrote in a note to clients.
Revenue in the transportation business - the train-making division - slumped 10 percent to $1.95 billion in the quarter. The company's order intake in the business fell 3.4 percent to $8.5 billion in 2016.
Bombardier said it delivered 86 commercial aircraft in 2016, compared with 76 in 2015.
The company reported a 12.7 percent drop in revenue to $4.38 billion.
Analysts on average had estimated a 3 cent loss on revenue of $4.64 billion, according to Thomson Reuters I/B/E/S.
($1 = 1.3053 Canadian dollars)
(Reporting by Allison Lampert and Arathy S Nair in Bengaluru; Editing by Shounak Dasgupta and Bernadette Baum)