Bombardier profit hit by aircraft cancellations

Wed Jun 3, 2009 5:20pm EDT
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By John McCrank

TORONTO (Reuters) - Profit at Bombardier Inc (BBDb.TO: Quote) fell 31 percent in the latest quarter as the number of corporate jet cancellations surged due to the recession, but weakness in the aerospace market may have bottomed out, the company said on Wednesday.

The world's No. 1 passenger train maker and No. 3 civil aircraft manufacturer said it had 61 business aircraft cancellations during its first quarter. That was offset by 20 new business aircraft orders, and 50 new commercial aircraft orders, for a net of nine aerospace orders.

A year earlier, the company reported 118 aerospace orders.

"The first-quarter results for fiscal 2010 followed the trend that emerged in the preceding quarter and therefore we continue to see an abnormal number of deferrals and cancellations," Guy Hachey, president and chief operating officer of Bombardier Aerospace, said at the company's annual shareholders meeting.

In a conference call with analysts, Hachey said the company had 25 jets without buyers, known as "whitetails", due to cancellations. He said Bombardier was in active discussions with several potential buyers for some of the planes.

"In the last six to seven weeks, we've seen a bit more interest in the market, not that it's been buoyant, but certainly, compared to what we were seeing in January, February and March, April and May were much more active months."

Bombardier maintained its view that corporate jet deliveries would be 25 percent lower for the year, while it expects commercial aircraft deliveries to rise by 10 percent.

In early April, the company said it would cut 3,000 jobs, on top of nearly 1,400 layoffs announced earlier in the year.   Continued...

<p>Pierre Beaudoin (L), president and chief executive officer of Bombardier Inc., and his father Laurent Beaudoin, chairman of the board of directors, pose prior to the company's annual general meeting in Montreal, June 3, 2009. REUTERS/Christinne Muschi</p>