UPDATE 1-Bombardier profit misses estimates; lowers 2014 margin target

Thu Feb 13, 2014 7:41am EST
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Feb 13 (Reuters) - Canadian plane and train maker Bombardier Inc reported a lower-than-expected quarterly profit due to a fall in gross margin and forecast a slowdown in revenue growth at its rail unit this year.

The Montreal-based manufacturer of the brand-new CSeries jetliner also lowered its full-year target for core earnings margin, a closely watched performance measure, at both its aerospace and rail businesses.

Bombardier's fourth-quarter revenue rose 15 percent to $5.32 billion, beating analysts' average estimate of $5.05 billion, according to Thomson Reuters I/B/E/S.

However a 16 percent rise in cost of sales led to gross margins falling to 11.8 percent from 12.4 percent a year earlier.

Bombardier reported net income of $97 million, or 5 cents per share, for the quarter ended Dec. 31.

It posted a loss of $4 million, or 1 cent per share, a year earlier mainly due to a charge of $119 related to a plant closure and jobs cuts in its rail business.

Excluding items, the company earned 7 cents per share in the latest quarter, below the average analysts estimate of 11 cents per share.

Bombardier said it expects margins on earnings before financing expenses, financing income and income taxes (EBIT) for its aerospace division to be 5 percent in 2014, down from its earlier target of about 6 percent.   Continued...