MONTREAL (Reuters) - Profit at Bombardier Inc nearly doubled in the fourth quarter, as the result of increased deliveries of business and regional jets and an income tax benefit.
Bombardier, the world’s top passenger train maker and No. 3 civil aircraft manufacturer, said on Thursday it earned $218 million, or 12 cents a share, in the quarter ended January 31. That was up from a profit of $112 million, or 6 cents a share, a year earlier and comfortably beat analyst expectations.
Analysts polled by Reuters Estimates had expected the Canadian company to post earnings of 8 cents a share, before exceptional items.
Excluding a $5 million income tax recovery, profit was 9 cents a share, but the results were still stronger than expected, said Fadi Chamoun, an analyst at UBS Investment Research.
“(Bombardier) reported strong fourth-quarter ‘08, exceeding our numbers on all metrics,” he wrote in a research note.
The profit margin in Bombardier’s aerospace group rose to 6.7 percent from 4.8 percent a year earlier.
The Montreal-based company said it expects to hit its target of 8 percent in fiscal 2009, a year earlier than planned, though that advance stems largely from an accounting change.
Profit margin in train-making was flat at 4.6 percent.
Revenue rose 19.2 percent to $5.27 billion from $4.42 billion, mainly on stronger business and regional jet deliveries. Analysts had forecast $4.89 billion in revenues.
The results sent Bombardier shares up 7 percent on Thursday. The class B shares were up 40 Canadian cents at C$6 on the Toronto Stock Exchange by early afternoon, though still below their year high of C$6.97, reached last June.
Bombardier’s order backlogs at January 31 were at record levels, reaching $22.7 billion in aerospace, up 72 percent from $13.2 billion. The trains backlog rose to $30.9 billion from $27.5 billion.
Jacques Kavafian, an analyst at Research Capital, said he expects Bombardier to boost its aerospace backlog further this year, with a book-to-build ratio of more than 1.5-to-1.
“We believe the higher aerospace backlog will help margins, partially offset by a strong Canadian dollar,” he said in a research note.
Aircraft deliveries rose to 361 for the year from 326 a year earlier, aided by a surge in business jet business. In the quarter, deliveries rose to 115 from 101.
Bombardier expects deliveries to increase this year for business jets, and to be flat for regional jets.
In the regional jet sector, the main competitor has traditionally been Brazil’s Embraer, but the Canadian firm will face a new rival by 2013 when Mitsubishi Heavy Industries rolls out what would be Japan’s first passenger jet.
The 70- to 90-seat Mitsubishi aircraft would compete with Bombardier’s flagship regional jet offering.
“We think we have the experience and know-how to remain the leader in this industry. It may mean additional investment,” Pierre Beaudoin, president of Bombardier Aerospace, said during a conference call with analysts and media on Thursday.
Bombardier did not offer an update on progress in its search for launch customers for its 110- to 130-seat CSeries airliner, which would enter service by 2013 in a market sector dominated by Boeing Co and Airbus EADS.
There has been speculation it may want to make a big splash for the $3.2 billion CSeries development plan by unveiling orders at the Farnborough International Air Show in mid-July.
Meantime, the company expects to expand its role in China’s plane and train industries through joint ventures and other arrangements with Chinese firms.
Bombardier, which will have about 4,000 employees in China this year, expects to broaden its partnership with state-owned China Aviation Industry Corp I and is considering a joint venture in rail systems signaling technology in China, company executives said during Thursday’s call.
Additional reporting by Sweta Singh in Bangalore and Scott Anderson in Toronto; Editing by Rob Wilson