Bombardier revenue could double in 5 years, sees dividend hike
By Solarina Ho
TORONTO (Reuters) - Canada's Bombardier Inc (BBDb.TO: Quote) said revenue could nearly double over the next five years, boosted by its new fleet of business and commercial aircraft, and that it planned to plow some of the cash into bigger dividend payments.
The Montreal-based aircraft and rail car builder, which issued a lackluster 2013 outlook last month, is planning to deliver the first of its new business Learjets this year and the its first CSeries commercial aircraft next year.
Bombardier said revenue is expected to grow by more than 30 percent by 2015 and could grow between $10 billion and $16 billion during the next five-plus years. Revenues dropped about 9 percent in 2012 to $16.8 billion.
The expected growth will generate significant cash, Chief Executive Pierre Beaudoin said at the company's Investor Day in New York, that was also webcast. Bombardier's top priorities are to restore its credit rating back to investment grade and to raise its dividend in line with other industrial companies.
Executives said its aerospace division alone could represent $8 billion to $12 billion of additional revenue a year.
Bombardier's new CSeries is expected to make its first test flight by the end of June. It is the company's largest jetliner and a $3.4 billion challenge to industry leaders Boeing Co (BA.N: Quote) and Airbus EAD.PA for the lucrative 100-149 seat, single-aisle market.
"We believe that we are building a plane for a niche that's going to have substantial, substantial revenue opportunity for quite a bit of time," said Guy Hachey, president and chief operating officer of Bombardier Aerospace. Continued...