Canadian planemaker Bombardier reported a wider-than-expected second-quarter loss amid rising costs for increased production of the new C Series airliner, but managed to burn through less of its cash.
The planemaker swung to an adjusted loss of six cents a share, according to a statement on Friday, one cent worse than analysts’ average estimate.
Revenue decreased 6.7 per cent to $4.31 billion, compared with an average estimate of $4.18 billion.
Chief executive Alain Bellemare is pressing ahead with a five-year plan to reduce risk and bolster cash flow after revamping his senior management team. He took over last year following delays in the development of the C Series jet, which finally entered commercial service last month – about two and a half years after the initial target.
Bombardier makes the wings for the C Series at its Belfast facility where it employs more than 5,000 people.
After bringing in more than $3 billion in 2015 by issuing shares and debt, Mr Bellemare raised a further $2.5 billion this year by selling 30 per cent of the train-making unit to Caisse de Depot et Placement du Quebec and a 49.5 per cent stake in the C Series to the Quebec government.
Reaffirmed forecast
Bombardier on Friday reaffirmed its full-year forecast. Revenue in 2016 will be $16.5 billion to $17.5 billion, and earnings before interest and taxes will range from $200 million to $400 million.
The planemaker spent $490 million of free cash flow in the second quarter, after burning through $808 million a year earlier.
Bombardier cut production of its Global 5000 and 6000 business jets by about 40 per cent last year and delayed entry into service of another model by two years amid shrinking demand for large private planes.
The company’s use of free cash flow is a key variable for analysts, who had predicted it would spend $623 million in the latest quarter.
Ilyushin Finance, a Moscow-based leasing company, reduced its C Series order "to align with their current market needs", Bombardier said. Iluyshin's firm order now includes 20 CS300 aircraft and one Q400 turboprop, along with options for five Q400s. It originally had ordered 32 CS300s, with options for 10 more.
