Bombardier profit drops; shares rise on outlook
By Susan Taylor
TORONTO (Reuters) - Canada's Bombardier Inc reported a sharp drop in quarterly sales and profit on Thursday partly because aircraft deliveries dropped but its shares rose as much as 6.5 percent as investors focused on the company's optimism outlook.
The stock, which had fallen after its results were announced, later reversed direction, gathering speed during an afternoon conference call as the world's third biggest commercial planemaker stressed that new orders were picking up and its backlog was healthy.
"Management is characterizing the poor result this morning as timing-related and is speaking very optimistically about new orders/deliveries in the balance of the year," explained RBC Capital Markets analyst Walter Spracklin in an email.
Bombardier's stock had dropped more than 10 percent in the week leading up to the results.
The Montreal-based plane and train maker, which warned in March that aircraft deliveries would dip in 2012, said on Thursday revenue fell 25 percent as it introduced new aircraft and ramped up deliveries on complex new train orders.
First-quarter profit fell 14 percent to $190 million, or 10 cents a share, from $220 million, or 12 cents a share, a year earlier. Revenue declined 25 percent to $3.5 billion.
While profit matched analysts' expectations, revenue fell far short of the consensus estimate of $4.52 billion, according to Thomson Reuters I/B/E/S.
"Certainly the results across the board are weak. We weren't expecting a lot and we didn't get much," said PI Financial analyst Chris Murray. Continued...