Feb 13 Canadian plane and train maker Bombardier
Inc reported a lower-than-expected quarterly profit
due to a fall in gross margin and forecast a slowdown in revenue
growth at its rail unit this year.
The Montreal-based manufacturer of the brand-new CSeries
jetliner also lowered its full-year target for core earnings
margin, a closely watched performance measure, at both its
aerospace and rail businesses.
Bombardier's fourth-quarter revenue rose 15 percent to $5.32
billion, beating analysts' average estimate of $5.05 billion,
according to Thomson Reuters I/B/E/S.
However a 16 percent rise in cost of sales led to gross
margins falling to 11.8 percent from 12.4 percent a year
Bombardier reported net income of $97 million, or 5 cents
per share, for the quarter ended Dec. 31.
It posted a loss of $4 million, or 1 cent per share, a year
earlier mainly due to a charge of $119 related to a plant
closure and jobs cuts in its rail business.
Excluding items, the company earned 7 cents per share in the
latest quarter, below the average analysts estimate of 11 cents
Bombardier said it expects margins on earnings before
financing expenses, financing income and income taxes (EBIT) for
its aerospace division to be 5 percent in 2014, down from its
earlier target of about 6 percent.
The company said it expects EBIT margin of about 6 percent
at its rail unit in 2014. However, Bombardier said its earlier
target of 8 percent remains the objective.
Bombardier said it expects a mid-single digit percentage
growth in the unit's revenue, excluding currency impacts, in
2014. Revenue at the rail unit grew 12.6 percent in 2013.
The company said on Thursday the initial ground and flight
test performance results of the CSeries jetliner program were in
line with the company's expectations.
Last month, Bombardier warned that the CSeries would not go
into commercial service until the second half of 2015, the
latest in a string of delays that has pushed back the CS100's
entry into service by some 18 to 24 months.
Bombardier shares have fallen more than 8 percent since the
CSeries announcement. They closed at C$4.04 on Wednesday on the
Toronto Stock Exchange.