Bombardier 4Q Income Soars

Bombardier earned a net income of $325 million, exceeding analyst expectations, even though revenue remained relatively flat.

TORONTO (AP) -- Bombardier reported Thursday that it earned a net income of $325 million in fourth-quarter net earnings, exceeding analyst expectations, even though revenue at the world's third-largest maker of commercial aircraft remained relatively flat.

The Montreal-based company said it earned 18 cents per share in the three months that ended Jan. 31. That compared with net income of $179 million or 10 cents a share a year ago.

Revenue was nearly unchanged at $5.37 billion compared with $5.35 billion in the year-earlier quarter.

Bombardier shares soared more than 11 percent after the report was released to CA$7.04 on the Toronto Stock Exchange, a new 52-week high. They were trading a little lower in late morning.

Analysts said the results were very positive and signaled strong opportunities for a turnaround.

"We believe that ongoing positive trends in the business jet market, as well as potential new CSeries (jetliners) orders in the coming months, will push the stock higher," Cameron Doerksen of National Bank Financial wrote in a report.

Bombardier, which reports in U.S. dollars, says it made $769 million, or 42 cents per share for the full year, compared with $707 million or 39 cents the previous year, although full-year revenue was down at $17.7 billion from $19.4 billion.

Analysts had expected that Bombardier's adjusted earnings for the quarter would increase just one cent to 11 cents per share on $5.25 billion of revenues.

For the year, they forecast 35 cents of EPS, down from 39 cents a year earlier on $17.7 billion of revenues.

"This past year has been challenging yet positive," president and CEO Pierre Beaudoin said.

"Our efforts to lean out our cost structure combined with our continued focus on operational excellence have enabled us to increase our profitability despite this year's reduction in revenues."

Beaudoin said the Aerospace and Transportation groups have managed their working capital well, which resulted in free cash flow generation of $605 million compared to a negative amount last year.

The transportation segment increased its profit margin for the sixth consecutive year as it moves toward its target of 8 percent.

Beaudoin said the Aerospace Division appeared to have turned the corner with business jet orders picking up substantially in the fourth quarter.

"To further strengthen our product leadership position, we continued to make progress on the development of new products within our business and commercial aircraft segments, both of which have healthy long-term growth prospects," Beaudoin said.

He said Transportation delivered a strong performance in fiscal year 2011 and that Bombardier's highest level of new orders ever brought its backlog to a record level of $33.5 billion at the end of the year.

"This is a testimony to our strategy of developing innovative products that meet customer needs globally," he said.

Besides the results, industry analysts were eagerly awaiting the company's aerospace profit margin guidance for fiscal 2012.

Benoit Poirier of Desjardins Securities said he expected the world's third-largest aircraft manufacturer would seek to achieve 10 to 12 percent margin within three years.

He forecast that the railway division's margins would be 5.3 percent in fiscal 2012 and 6.8 per cent the following year.

Bombardier's shares have gained 26 percent so far this year. Poirier believes they can reach CA$8 within a year because of the continuing improvement of the business jet market and potential CSeries orders.

Bombardier's plane and train divisions employ about 65,000 people around the world.

Berlin-headquartered Bombardier Transportation is the world's largest rail manufacturer with more than 100,000 of its vehicles in operation in over 60 countries.

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