Bombardier's profits dip despite robust demand for metro rail cars
Bombardier, a world leader in metro rail cars and aerospace business, said Wednesday that orders for its business jets still remain slack despite signs of global recovery. But demand for its metro cars remains strong, the company said, reporting a 27 percent drop in its quarterly profits.
The Delhi Metro Rail Corporation (DMRC) has just placed additional orders for 40 rail cars at a cost of $55 million.
The world's third largest maker of civilian aircraft had suffered heavily as companies cancelled orders for dozens of business jets last year amid the deepening global economic crisis.
Reporting a second quarterly profit of $148 million - down from $202 million, Bombardier president and CEO Pierre Beaudoin said, "The uncertain economic environment continues to be reflected in Aerospace's financial results. However, the group is starting to see signs of recovery as shown by the significant reduction in business aircraft order cancellations." The Montreal-based company reported revenue of $4.1 billion for the second quarter as against $4.9 billion for the corresponding period last year. Bombardier's aerospace division head Guy Hachey said, "Things are improving, but not to where we thought we would be at this point. We see a slow progressive trend."
The company delivered 46 just business planes during the quarter as compared with 81 during the same period last year. Highlighting the uncertainty in the aerospace business, Hachey said that, on average, for orders for 26 aircraft, 12 got cancelled. "That's the best we have had in the last seven quarters," he said, hoping that the demand will pick up later this year. He said Bombardier was in discussions with four or five major buyers for its C-Series long-range intercontinental commercial jet. The company already has orders for 90 such planes - with 100-149 seats as well as options of 90 seats.
The company also expects order for business jets to pick up in the second half of the year, he added.
However, the demand for its rail cars remains high, the company said. The Bombardier CEO said, "During this quarter, transportation (rail/metro) has shown a strong level of order activity, benefiting from its wide portfolio and its enviable global market position. The group improved its profitability while signing $4.3 billion of new orders, bringing its order backlog to $30.3 billion."
Bombardier has so far sold more than 3,900 rail cars to cities like Delhi, New York, New Jersey, Montreal, Toronto, Paris, London, Berlin, Bucharest, Stockholm, Shanghai, Shenzhen, and Guangzhou.
