Bombardier says lower jet production to hurt revenue in 2016
By Allison Lampert
MONTREAL (Reuters) - Canada's Bombardier Inc BBDb.TO warned on Tuesday a previously announced business jet production cut will drive down revenue in 2016, but said its long-delayed CSeries jet program will help sales at the plane and train maker top $25 billion by 2020.
The Montreal-based company, which posted revenue of $20.1 billion last year, also said it expects its liquidity position to be strong in 2016, helped by recent cash infusions from Quebec's public pension fund and the provincial government.
Executives told shareholders and analysts at its investor day in New York City that its 2016 earnings before interest and tax (EBIT) would be hurt due to the CSeries passenger jet program ramp-up.
But it sees EBIT margins rising back into the 7 to 8 percent range by 2020 and said it plans to start reducing debt starting in 2019 and 2020.
The plan's goal is to "rebuild earnings and cash flow," Chief Executive Alain Bellemare said.
Certification for the narrow-body, medium-range CSeries jets was "very close", but no new orders were imminent, Reuters reported on Tuesday, citing sources familiar with the matter.
Bombardier said last week it had finished flight testing of the aircraft, due to enter service with Lufthansa (LHAG.DE: Quote) subsidiary SWISS in the first half of 2016.
Quebec-based Bombardier has long been struggling with the delayed CSeries jet program. Continued...