TORONTO (Reuters) - Bombardier Inc (BBDb.TO) said on Wednesday its quarterly profit nearly tripled on strong demand for its aircraft and rail equipment, sending its stock to a six-year high.
Bombardier, the world’s No. 1 passenger train maker and No. 3 in civil aircraft, said deliveries for its aircraft rose while the firm order backlog increased in the first quarter.
Revenue generated by its transportation division rose, reflecting orders for both locomotives and regional train equipment, as well as a positive impact from currency trends.
The strong backlog in its business and regional jets, including the fuel-efficient turboprop, should continue to be a driver in its earnings growth, said Cameron Doerksen, analyst with Versant Partners in Montreal.
“The backlog they have is fairly secure, and I think the deliveries for the next few years are still pretty solid,” said Doerksen.
Net income rose to $226 million, or 12 cents a share, in the first quarter ended April 30, from $79 million, or 4 cents a share, a year earlier.
The stronger-than-expected results sent the company’s stock up 62 Canadian cents, or 7.6 percent, to C$8.78 by late afternoon on the Toronto Stock Exchange, its highest since August 2002.
Analysts, on average, had expected earnings per share, before exceptional items, of 9 cents, according to Reuters data.
Revenue for the quarter was $4.79 billion, up 21 percent from $3.97 billion.
Aircraft deliveries rose to 87 planes during the quarter, from 78 in the same period last year.
Major orders came from SAS Scandinavian Airlines and three of its affiliates for 27 regional jets and turboprops worth about $883 million.
Pushing into the emerging markets of Russia and Asia has allowed the company to decrease its exposure to the U.S. market, which will help insulate it from the impact of a sluggish U.S. economy, said incoming Chief Executive Officer Pierre Beaudoin during Bombardier’s annual meeting of shareholders in Montreal
Doerksen said global demand for turboprops should remain strong given the recent surge in jet fuel prices.
“There’s still lots of demand for turboprops because they are so fuel efficient, and you’re seeing more interest in airlines, especially in the U.S., which had kind of gotten away from turboprops and are now getting back into them,” said Doerksen.
The company said demand for aircraft was solid, though net orders decreased to 118 compared to 174 the year before.
With an overall backlog of $55.5 billion, both of its transportation and aerospace groups are well positioned for more profitable growth, the company said.
The firm order backlog at its aerospace division grew to a record $24.1 billion, up 6 percent from the end of January, while backlog at its transportation division was up slightly at $31.4 billion compared with $30.9 billion at the end of January.
Bombardier said it planned to reinstate its quarterly dividend of 2.5 Canadian cents a share. It last paid a dividend in 2005.
At the annual meeting, Bombardier offered few details on its proposed CSeries airliner, saying it will make a decision later in the year.
Bombardier has been looking for firm orders before formally deciding to go ahead with the $3.2 billion plan to develop the new 110- to 130-seat airliner.
Jacques Kavafian, an analyst with Research Capital, said he expects the CSeries to be launched at Britain’s Farnborough International Airshow, a major trade show which runs July 14 to 20.
“I think, this year, Farnborough will be Bombardier’s show,” said Kavafian.
“It’s a great market that is not currently served,” he added about the CSeries. “Just like they did with the regional jet, (where) they created their own category, in this case they are also going to create that category.”
The proposed CSeries is expected to enter service by 2013.
Reporting by Leah Schnurr, additional reporting by Scott Anderson; editing by Frank McGurty