The Successful Investor Hotline – Friday, September 5, 2014

Article Excerpt

BOMBARDIER INC., Toronto symbols BBD.A $3.70 and BBD.B $3.63, has fallen 5% in the past two weeks on concern about further setbacks for its new CSeries passenger jet. In late May 2014, an engine problem forced the company to suspend testing. The engine’s manufacturer has since investigated and feels it has fixed the fault. Bombardier is now testing the modified engines at its Montreal plant and plans to resume test flights by the end of this month. These problems have prompted Sweden’s Braathens Aviation to withdraw as the CSeries’ first customer. Braathens has not cancelled its order for 10 planes, but it will postpone delivery from the second half of 2015 to 2016 or later. Bombardier still has firm orders for 203 CSeries jets, plus options for an additional 310. If the buyers exercise all of these options, the entire order of 513 aircraft would be worth roughly $34 billion U.S. That’s equal to 1.9 times Bombardier’s 2013 revenue of $18.15 billion U.S. The…