May 2, 2019, © Leeham News: Bombardier today reported its first quarter earnings, which were lower than originally expected by analysts and previewed last week.
The Belfast plant produces wings for the Airbus A220 (nee C Series). This plant and the Morocco facility were reorganized previously into an Aerostructures unit that has been profitable.
Bombardier now labels these plants as non-core to its business.
The CRJ program, which is for sale, has been put into a new Bombardier Aviation business unit that includes the business jets.
Bombardier last week announced that its 1Q financials were lower than previous guidance. Today’s earnings release affirms last week’s announcement.
BBD’s results were boosted by the closing of the sale of its training unit, adding $516m to the results. The company used $1bn in free cash flow. For the full year, Bombardier now projects revenue of $17bn, which is $1bn lower than its previous guidance.
Revenues for the CRJ/Q400 programs were just $241m, with only four aircraft delivered in the first quarter. The Q400 program has been sold to Canada’s Viking Air. Closing is expected mid year. Bombardier expects 30 airliner deliveries for the full year. Bombardier forecasts revenues of $1.15bn and a loss of $125m for the year for this business unit.
CEO Alain Bellemare said that this year, like last year, is a transition cycle. Bombardier is now moving toward a growth cycle, he said.
There will be two strong pillars for growth, he said: Bombardier Aviation and Bombardier Transportation. The Global 7500 is key to the growth for Aviation.
He said Bombardier is focused on building backlog for the CRJ even as it continues to “explore strategic options” for the program.
“Right sizing” Aerostructures is the best use of capital, Bellemare said. Remaining Aerostructures operations will be consolidated into Bombardier Aviation.
“Bombardier Aviation is well positioned to become the best business jet unit in the world,” he said, and maximize the CRJ program.
Bellemare said that the future of Bombardier is with business aircraft and rail. “Clearly we are divesting out of commercial,” he said. “We want to focus on business aircraft moving forward.”