Bombardier profit dips as plane deliveries, orders fall

Thu Oct 31, 2013 3:13pm EDT
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By Solarina Ho

TORONTO (Reuters) - Canadian plane and train maker Bombardier Inc (BBDb.TO: Quote) reported a 15 percent fall in net profit on Thursday, pressured by fewer aircraft orders and deliveries in the third quarter and contract issues in its train unit.

Montreal-based Bombardier also did not release any flight test data for its brand-new CSeries aircraft or offer an update on whether the plane will meet its ambitious schedule of going into commercial service by next September.

After the test plane's inaugural flight about a month and a half ago, it has only flown three more times, raising questions over whether the testing phase is on track.

Results fell short of forecasts and sent shares sliding more than 8 percent on the Toronto Stock Exchange.

Cameron Doerksen, an analyst with National Bank Financial, lowered his rating to "sector perform" from "outperform" on Thursday with the view that the stock has limited upside over the next one or two quarters.

"While the weaker aircraft deliveries were mostly anticipated, we are clearly disappointed by the margin performance in transportation," Doerksen said in a client note.

"We believe that Bombardier will receive new orders for the CSeries as the flight test program progresses ... however, if no new orders are announced in the coming months, we suspect that the market will become more skeptical of the program."

Bombardier hopes the CSeries aircraft family can catapult it into the low end of a market now dominated by Boeing Co (BA.N: Quote) and Airbus EAD.PA. The first test plane was unveiled in March and took flight for the first time in September after months of delays.   Continued...

Bombardier's CSeries aircraft lands after its first test flight in Mirabel, Quebec September 16, 2013. REUTERS/Christinne Muschi