A view inside the fuselage of a Bombardier Challenger aircraft under construction is shown at Bombardier's Challenger manufacturing plant in Montreal, Wednesday, April 5, 2023. THE CANADIAN PRESS/Graham Hughes
MONTREAL – Bombardier Inc. turned a profit in its latest quarter despite the ongoing supply chain issues plaguing the aviation sector, as the business jet maker notched slightly more deliveries at higher prices.
The company, which keeps its books in U.S. dollars, earned US$302 million in net income in the quarter ended March 31 after a US$287 million loss in the same period a year earlier. Revenue rose 17 per cent to US$1.45 billion from US$1.25 billion.
Chief executive Éric Martel said 2023 marks the third straight year of supply chain issues.
“It’s been challenging,” he told analysts on a conference call Thursday.
One analyst on the call noted the problems facing rival Gulfstream Aerospace, which reported lower than expected earnings last year and weaker forecasts for 2023.
“We’re probably facing the same type of challenges that they do face. We saw them coming earlier – we saw them and we did mitigate those risks,” Martel said.
“We feel pretty good about the outlook we provided for the year.”
Last month, Bombardier increased its financial targets for 2025, aiming for more than US$9 billion in revenue for 2025, up from about US$7.5 billion.
The plane maker is looking to boost production of private jets to 138 this year from 121 in 2022, with the assembly process on track, executives said Thursday. Bombardier rolled out 22 Challenger and Global jets in its first quarter, versus 21 planes a year earlier when it also produced the historic Learjet, which is no longer in production.
The banking crisis that rattled markets earlier this year prompted a pause in new bookings, but only for a few weeks, Martel said.
Meanwhile, roughly five per cent of all used business jets worldwide are currently for sale. That marks an increase from 3.1 per cent as of February 2023 – the lowest level in more than 25 years, according to market data firm Jetnet IQ – but still means new products offer a likelier option for buyers, which bodes well for Bombardier.
Martel called the percentage of pre-owned inventory on the market “extraordinarily low” versus a more typical range of between 10 and 14 per cent.
Business at Bombardier’s service centres across six continents also remains “very high,” contributing to its revenue boost, he said.
The global business jet market is expected to grow to US$23.7 billion by 2028 from US$18.4 billion last year, according to a March report from market research firm IMARC Group.
Bombardier said its profit amounted to US$2.98 per diluted share in its first quarter compared with a loss of US$3.09 per diluted share a year ago.
On an adjusted basis, the Montreal-based aircraft maker earned US$1.06 per diluted share in its latest quarter compared with a loss of 80 cents per share in the same quarter last year.
It said it repaid about US$400 million in debt in its first quarter.
This report by The Canadian Press was first published April 27, 2023.
Companies in this story: (TSX:BBD.B)
