Bombardier sees jet market stabilizing; shrs jump
By John McCrank
TORONTO (Reuters) - Bombardier Inc posted a 22 percent drop in quarterly profit on Wednesday on weakness in its profitable business jet segment, but its stock rallied as results topped analysts' forecasts and the company said the business aircraft market appeared to be stabilizing.
The world's No. 3 commercial aircraft maker and No. 1 train maker said it had 80 cancellations of business jets in the quarter ended July 31, compared to 27 new orders.
The cancellations included a firm order for 25 Learjet aircraft from private upstart Jet Republic, which declared insolvency in August.
"We did see a slowing down of cancellations as the quarter progressed," Guy Hachey, president of Bombardier Aerospace, said in a conference call.
The new business jet orders were nearly double those of the previous quarter and most came toward the end of the period. Hachey said the trend was continuing into the current quarter.
"There is stabilization and we're seeing that at the industry level," he said, echoing recent statements by rivals Textron Inc and General Dynamics.
Shares of the Montreal-based company were up 32 Canadian cents, or 8.4 percent at C$4.15 on the Toronto Stock Exchange on Wednesday afternoon. The shares have risen nearly 90 percent since hitting a yearly low in March.
National Bank Financial upgraded Bombardier to "outperform" from "sector perform" and raised its price target to C$5.50 from C$4.25 after the results were released. Continued...