Bombardier shares jump on smaller loss, better margins
By Allison Lampert
MONTREAL (Reuters) - Bombardier Inc (BBDb.TO: Quote) shares jumped 5 percent in morning trading on Thursday, after the Canadian plane and train maker reported a lower-than-expected adjusted net loss in the third quarter and said it would end 2016 with higher margins.
The company, which has struggled in recent years with cost overruns as it developed its CSeries commercial jet, raised the lower end of its full-year forecast for earnings before interest and tax (EBIT) to $350 million from $200 million, while maintaining the upper end at $400 million.
“We are in full motion when it comes to turnaround,” Chief Executive Alain Bellemare said in an interview regarding his 5-year plan to improve results.
Montreal-headquartered Bombardier revised its transportation division's 2016 revenue forecast down to $8 billion from $8.5 billion, but raised its margin forecast to above 6.5 percent.
Chief Financial Officer John Di Bert told a call with analysts that Bombardier is well placed to further increase margins.
"The margin growth is a sign of current performance and also things to come," Di Bert said.
Bombardier's reported 32 percent rise in the transport division's order intake during the third quarter ended Sept. 30 to $2.9 billion and Di Bert suggested revenue could rise in 2017.
“I think we’ve positioned ourselves well here with another solid of year of orders,” he said. Continued...