* Learjet 85 launch pushed back to summer 2014
* 2013 aerospace EBIT margins expected to be similar to 2012
* Fourth-quarter adjusted EPS $0.10 vs $0.13 year earlier
* Shares tumble 9 percent on Toronto Stock Exchange
* First C-Series flight will take place by end of June
(Updates with new comments, details)
By Solarina Ho
TORONTO, Feb 21 Bombardier Inc
reported quarterly results on Thursday that fell short of
expectations and issued a lackluster 2013 outlook, sending
shares of the Canadian aircraft and train maker down 9 percent.
The company added to investors' disappointment by announcing
it was pushing back the first delivery of its Learjet 85
business aircraft to the summer of 2014 from its previous target
of late 2013. It was the second time since November it delayed a
major aircraft program.
Before Thursday's pullback, Bombardier stock had jumped 37
percent since late November when the company signed a record
$7.8 billion deal with Swiss charter operator VistaJet. On
Wednesday, it won a deal that could be worth as much as $3.42
billion for its new C-Series large commercial jets.
But the Montreal-based company's fourth-quarter profit
tumbled 93 percent, pulled lower by charges for a plant closure
and job cuts in its rail division. Margins slumped, partly on
lower revenue from China and higher costs per unit sales.
For Bombardier Aerospace, it expects margins on earnings
before financing expenses, financing income and income taxes
(EBIT) - a closely watched performance measure - to be little
changed in 2013 at about 5 percent and rise to about 6 percent
"Why was the stock down so strongly? Margin and production
guidance at BA was weaker than expected at 5 percent and their
deliveries that are essentially flat year over year despite some
pretty strong backlogs," said Chris Murray, an analyst at PI
Financial Corp. "Their outlook is a little weaker, considering
they've recently won a number of fairly large orders."
In its rail unit, it delayed its target for an 8 percent
margin to 2014 from 2013. It did not provide a 2013 margin
forecast for the rail division.
Bombardier's total order backlog rose to a record $66.6
billion at the end of 2012 from $55.8 billion at the end of
2011. That includes orders for its new C-Series jetliner.
In aerospace, the company plans to deliver about 190
business and 55 commercial planes. The company, the world's No.
4 commercial plane maker, delivered a total of 233 planes last
LEARJET LAUNCH DELAY
Bombardier competes with Brazil's Embraer in the
smaller passenger-aircraft business. It aims to capture some of
the larger end of that market, now dominated by Airbus
and Boeing Co, with its 100-149 seat C-series plane.
The company said the revised timetable for the new Learjet
reflected technology problems that have been resolved.
In a conference call with analysts on Thursday, it expressed
confidence that the first flight of the new C-Series - its
ticket into the larger commercial jet market - would take place
by the end of June. Last November, it said it was delaying the
first flight by six months to June because of unspecified
The shares rose more than 4 percent on Wednesday, after it
said it won an order to sell up to 42 of the C-Series jetliners
to Russia's Ilyushin Finance Co in a deal that could be worth as
much as $3.42 billion.
"Having a customer make a firm commitment at this particular
point in the program is a very good indicator that the customer
feels like the program is on track," said PI Financial's Murray.
Indeed, Bombardier executives said the company was at a
"turning point" and that it was "on the cusp of seeing
significant revenue growth."
At least one analyst upgraded his rating on Thursday.
Cameron Doerksen at National Bank Financial said the focus will
now shift to stronger results in 2014 and beyond, despite the
disappointing quarterly results and 2013 guidance.
The company, which reports in U.S. dollars, said net profit
in the fourth quarter fell to $14 million from $214 million a
Bombardier took a restructuring charge of $119 million
related to the roughly 1,200 job cuts in its rail unit and the
closure of a freight car plant in Aachen, Germany.
A temporary drop in revenue from China, traditionally a
strong market for the company, also held back the results, but
executives said revenue had returned to normal and they were
expecting a significant increase in business from China in 2013.
On an adjusted basis, net income fell to $188 million, or 10
cents a share, from $227 million, or 13 cents a share, a year
Fourth-quarter EBIT totaled $175 million, or 3.7 percent of
revenues, compared to $293 million, or 6.8 percent, for the same
period a year earlier.
Revenue rose nearly 12 percent to $4.8 billion. Revenue in
the aerospace unit, which makes business, commercial and
amphibious craft, rose 30 percent to $2.6 billion. Revenue in
the transportation unit fell 4 percent to $2.2 billion.
Bombardier stock, which fell as much as 11 percent, closed
9.1 percent lower at C$3.89 on the Toronto Stock Exchange in
above average trading volume.
(Additional reporting by Susan Taylor in Toronto and Bhaswati
Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila, Nick
Zieminski, Peter Galloway and Tim Dobbyn)