* Learjet 85 launch pushed back to summer 2014
* 2013 aerospace EBIT margins expected to be similar to 2012
* Fourth-quarter adjusted EPS $0.10 vs $0.13 year earlier
* Shares tumble 9 percent on Toronto Stock Exchange (Updates with analysts’ comments, conference call and details)
By Solarina Ho
Feb 21 (Reuters) - Bombardier Inc reported quarterly results on Thursday that fell short of analysts’ expectations and issued a disappointing 2013 outlook, sending shares of the Canadian aircraft and train maker down 9 percent.
The Montreal-based company’s fourth-quarter profit tumbled 93 percent, pulled lower by charges for a plant closure and global job cuts in its rail division.
Earnings before financing expenses, financing income and income taxes, or EBIT before special items - a closely watched performance measurement - fell 67 percent, and margins in both its aerospace and transportation divisions slumped.
Bombardier said it expected EBIT margins at its aerospace unit to be little changed in 2013 at about 5 percent and rise to about 6 percent in 2014. In its transportation, or rail, unit, it delayed its target for an 8 percent margin to 2014 from 2013. It did not provide a 2013 margin forecast for the rail division.
“Although weak margins in both segments in Q4 are clearly going to be disappointing to the market, we think that the more important driver for the stock today will be the soft margin guidance for 2013,” said Cameron Doerksen, an analyst at National Bank Financial.
Even so, Bombardier’s total order backlog rose to a record $66.6 billion at the end of 2012 from $55.8 billion at the end of 2011. That includes orders for its new C-Series jetliner.
In its aerospace unit, the company said it plans to deliver about 190 business and 55 commercial planes, reflecting the strength of its business-jet segment and challenges for its commercial planes. The company, the world’s No. 4 commercial plane maker, delivered a total of 233 planes last year.
“2013 is definitely nothing to write home about on the aerospace margin side and that was disappointing, but 2014 and beyond looks like it’s going to get a lot better. Even in the second half of 2013, I think we’ll see improvements,” said David Tyerman, an analyst at Canaccord Genuity.
Bombardier announced it was pushing back the first delivery of its Learjet 85 business aircraft to the summer of 2014 from its previous target of late 2013.
The delay for the new Learjet was no surprise to analysts who noted that initial deliveries usually take place about a year after the first flight, which has yet to take place. Bombardier said the revised timetable reflected technology problems that have been resolved.
In a conference call with analysts on Thursday, the company expressed confidence that the first flight of the C-Series - its ticket into the larger commercial jet market - would take place by the end of June.
Last November, it said it was delaying the first flight by six months to June because of unspecified supplier delays.
Bombardier competes with Brazil’s Embraer in the smaller passenger-aircraft business. It aims to capture some of the larger end of that market, now dominated by Airbus and Boeing Co, with its 100-149 seat C-series plane.
On Wednesday, it said it won an order to sell up to 42 of the C-Series jetliners to Russia’s Ilyushin Finance Co in a deal that could be worth as much as $3.42 billion.
“Having a customer make a firm commitment at this particular point in the program is a very good indicator that the customer feels like the program is on track,” said Chris Murray, an analyst at PI Financial Corp.
Bombardier executives said the company was at a “turning point” and that it was “on the cusp of seeing significant revenue growth”.
At least one analyst upgraded his rating on Thursday. National Bank’s Doerksen said that despite the poor quarterly results and 2013 guidance, the focus will now shift to stronger results in 2014 and beyond.
The company, which reports in U.S. dollars, said net profit in the fourth quarter fell to $14 million from $214 million a year earlier.
Bombardier took a restructuring charge of $119 million related to the roughly 1,200 job cuts in its rail unit and the closure of a freight car plant in Aachen, Germany.
A temporary drop in revenue from China, traditionally a strong market for the company, also held back the results, but executives said revenue had returned to normal and they were expecting a significant increase in business from China in 2013.
On an adjusted basis, net income fell to $188 million, or 10 cents a share, from $227 million, or 13 cents a share, a year earlier.
Fourth-quarter EBIT totaled $175 million, or 3.7 percent of revenues, compared with $293 million, or 6.8 percent, for the same period a year earlier.
Revenue rose nearly 12 percent to $4.8 billion.
Revenue in the aerospace unit, which makes business, commercial and amphibious craft, rose 30 percent to $2.6 billion. Revenue in the transportation unit fell 4 percent to $2.2 billion.
Free cash flow rose 44 percent to $850 million.
“Poor quarter, but better outlook going forward and that’s going to be what shapes the company’s prospects from a share price standpoint over the next few years,” Tyerman said.
Bombardier stock, which fell as much as 11 percent, closed 9.1 percent lower at C$3.89 on the Toronto Stock Exchange in above average trading volume.
$1=$1.02 Canadian Additional reporting by Susan Taylor in Toronto and Bhaswati Mukhopadhyay in Bangalore; Editing by Sriraj Kalluvila, Nick Zieminski and Peter Galloway