Thursday, December 01, 2011

Bombardier profit up but cash burn still a worry

(Reuters) - Bombardier Inc reported a better-than-expected 31 percent rise in quarterly profit on Thursday, helped by higher aircraft shipments. But the company said economic uncertainty in the United States and Europe was still hurting demand for its commercial jets.

Bombardier, the world's third biggest commercial planemaker and largest trainmaker, again burned through more cash in the quarter than the market expected.

Free-cash flow usage more than tripled to $346 million in the three months, with the drain coming from the company's train unit as inventories built up there due to delays on several large contracts in Europe.

"While quarterly variances are expected, the significant drain year-to-date of $1.8 billion remains a concern," RBC Capital Markets analyst Walter Spracklin said in a note to clients.

Bombardier reported a third-quarter net profit of $192 million, or 11 cents a share, up from $147 million, or 8 cents a share, a year ago.

That was above the 10 cents analysts on average had expected, according to Thomson Reuters I/B/E/S. Bombardier stock was up 9 Canadian cents at C$3.87 shortly after the market opened.

Revenue rose 16 percent to $4.62 billion, also higher than the market expected.

Revenue at its aerospace division, which manufactures business, commercial and amphibious aircraft, was up 28 percent at $2.3 billion.

The group delivered 68 aircraft in the quarter, up from 51 in the same period in 2010. It received 34 net orders during the third quarter -- 30 for business jets, but just four for commercial planes.

"Commercial aircraft continues to be affected by the economic uncertainty in the U.S. and Europe," Bombardier said in a statement.

Revenue at Bombardier's transportation division rose 5 percent to $2.3 billion. It booked orders worth $1.6 billion for the quarter but used up cash of $347 million as a result of delays in shipping rolling stock in France and Germany.

The company's overall order backlog was $55.3 billion on October 31, up from $52.7 billion on January 31.

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