Canadian stocks: Bombardier looks to CSeries jets to boost aerospace sales

Bombardier Inc., Toronto symbols BBD.A $4.56 and BBD.B, recently reported better-than-expected earnings. However, the company may have to cut its regional-jet production, due to slowing demand. That caused the stock to fall. In the three months ended July 31, 2011, Bombardier’s earnings rose 56.7%, to $210 million, or $0.12 a share (all amounts in U.S. dollars). A year earlier, the company earned $134 million, or $0.07 a share. The latest earnings easily beat the consensus estimate of $0.10 a share. Revenue rose 17.4% to $4.7 billion. Revenue at the Canadian stock’s railcar division (which supplies 56% of its overall revenue) rose 26.0%, mainly due to strong demand from public-transit systems in Europe. This business received $3.9 billion of new orders in the quarter, down from $4.3 billion a year earlier. Its order backlog is now $33.9 billion, up from $33.5 billion on January 31, 2011. Revenue at the aerospace division (44% of overall revenue) rose 7.9%. The company delivered 56 aircraft during the quarter, up from 49 a year earlier. The Canadian stock’s order backlog of $23 billion for aerospace is up 19.8% from six months earlier. Demand for regional jets may be weakening, but the company’s larger CSeries planes are selling well. Bombardier now has 133 firm orders for this aircraft, plus options for another 119 planes. We covered Bombardier and other Canadian stocks in The Successful Investor Hotline for September 2, 2011, which you can view immediately when you take a 1-month free trial to The Successful Investor. Click here to learn how you can start profiting from The Successful Investor right away. (Note: If you are a current Successful Investor subscriber, please click here to view Pat’s recommendation. Be sure to log in first.)

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Scott Clayton

Scott is an associate editor at TSI Network. He is the lead reporter and analyst for Dividend Advisor, Power Growth Investor and Canadian Wealth Advisor and a member of the Investment Planning Committee. Scott began his investment and financial career working with Pat McKeough at The Investment Reporter in the 1980s. Subsequently, he worked at the Financial Post Corporation Service for 10 years. He joined TSI Network in 1998. He is a Bachelor of Economics graduate of York University, and he also has an M.B.A. from the Schulich School of Business.

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