(Recasts, adds details on Russian sanctions, CSeries,
July 31 Canada's Bombardier Inc plans
to cut more jobs and halt new hiring to help save costs, it said
on Thursday, and added that commercial talks for a Russian
assembly plant are ongoing despite sanctions.
Bombardier, which manufactures planes and trains, also
sought to allay worries about the pace of its cash burn after
posting higher revenues but lower net income.
Bombardier is in talks with Russian state-owned industrial
and defense conglomerate Rostec to open a manufacturing facility
for the Canadian firm's Q400 turboprop jet.
The European Union, U.S. and Canada have ratchet up
sanctions against Russia over the conflict in Ukraine.
"We're working hard to get to an agreement, so what's going
on in Russia has not affected our commercial discussions," Chief
Executive Pierre Beaudoin. "This is a situation that evolves
The company last week said it will restructure its aerospace
division, bruised in recent years by multiple delays in its
cash-draining CSeries program and by shrinking market share for
its existing aircraft portfolio.
Test flights on the CSeries were grounded two months ago due
to an engine problem and Bombardier reiterated that tests were
expected to resume "in the coming weeks" without giving further
The ambitious CSeries, which Bombardier hopes will dominate
the 100-to 150- seat market, is already 18 to 24 months behind
Bombardier's stock, down more than 20 percent this year, was
off 1.6 percent on the Toronto Stock Exchange.
Bombardier, which last week said it would restructure its
aerospace business and chop 1,800 jobs, said on Thursday that
further cost cuts, including eliminating 1,000 jobs in the
transportation unit, were aimed at lifting profitability in that
BMO Capital Markets analyst Fadi Chamoun said the
Montreal-based firm had had "a mixed quarter".
"While results are in line, free cash flow goals and
(Bombardier Transportation's) EBIT margin target for the year
appear challenging to achieve," he said in a note to clients.
The aerospace unit delivered a total of 62 aircraft during
the second quarter ended June 30, up from 57 deliveries a year
Aerospace revenue rose 11.4 percent to $2.51 billion in the
quarter, while revenue at its transportation business climbed
9.4 percent to $2.36 billion.
Total revenue rose 10.4 percent to $4.89 billion.
Bombardier's net income fell 14 percent to $155 million, or
8 cents per share, in the quarter.
On an adjusted basis, Bombardier earned 10 cents per share.
That was slightly higher than the average analyst estimate of 9
cents per share, according to Thomson Reuters I/B/E/S.
Bombardier's cash flow usage fell about 25 percent to $424
million during the quarter.
Liquidity stood at $3.9 billion as of June 30, including
cash and cash equivalents, which Bombardier said was enough to
carry it through to the CSeries' entry into service, expected
sometime in the second half of 2015.
(Reporting by Solarina Ho in Toronto and Sneha Banerjee in
Bangalore; Editing by Savio D'Souza, Bernard Orr)