(Updates with closing share price in fifth paragraph.)
Dec. 1 (Bloomberg) -- Bombardier Inc., the world’s third- biggest commercial-jet maker, reported higher quarterly profit than analysts estimated as plane deliveries increased.
Net income in the fiscal third quarter ended Oct. 31 increased 31 percent to $192 million from $147 million a year earlier, Montreal-based Bombardier said today in a statement. Adjusted profit of 11 cents a share beat the 10-cent average estimate of 19 analysts surveyed by Bloomberg.
The company delivered 68 planes during the quarter compared with 51 a year earlier. Bombardier’s backlog was $22.3 billion at the end of the period, up 16 percent from Jan. 31. The company said it’s working to meet a 2013 target for the debut of its CSeries jetliner, while trimming output of CRJ regional jets to meet diminished demand at some airlines.
“What we are driving for is delivering for 2013,” Pierre Beaudoin, Bombardier’s chief executive said of the CSeries. “We’re focused also on meeting the various customers, our promises that we made through the orders and also we’re very focused on making sure that this airplane delivers the performance that was anticipated,” he said on a conference call today.
Bombardier rose 5.3 percent to C$3.98 at the close in Toronto. The shares have declined 21 percent this year.
The company has a backlog of 133 firm CSeries orders and is working on closing agreements for 45 more at levels that don’t require “huge compromises to start delivery in 2013,” Beaudoin said. There will be more order announcements, he said.
Sales climbed 16 percent to $4.62 billion during the quarter, higher than the average analysts’ estimate of $4.54 billion. Bombardier’s train-manufacturing division saw a revenue increase of 6.9 percent.
The company, which traditionally has lower cash flow in the third quarter, has restarted deliveries for two of three stalled train and locomotive contracts, including one for France’s SNCF and another in Sweden, and is working on a third.
In the quarter, Bombardier held on to inventory as shipments were delayed, cutting into free cash flow by about $300 million. That should shift in the fourth quarter, executives said on the call.
“With the possible exception of slightly lower-than- expected sales at Bombardier Transportation, the company’s overall operating performance, and especially operational execution, remain strong,” Nicholas Heymann, an analyst at William Blair & Co., wrote in a note to clients today. He has an “outperform” rating on shares.
Liquidity available to Bombardier should rise above $4 billion in the fourth quarter, up from about $3.5 billion in the third, the company said.
In aerospace, sales gained 26 percent to $2.31 billion as Bombardier seeks orders for the new CSeries airliner. The jet will compete against the smallest aircraft offered by Airbus SAS and Boeing Co. when it enters service.
Bombardier also sees an advantage in its largest regional aircraft, CRJ1000, in the market about a year, after rival Embraer SA’s decision to upgrade its regional with new engines and wings by 2018 rather than build an all-new model, Beaudoin said. A new Embraer plan may have challenged the CSeries in the smallest slice of the narrow-body commercial jet market dominated by Airbus SAS and Boeing Co., he said.
“When we compete for an order on the CSeries, we never see the Embraer 190 in competition with the CSeries, that’s a different category, a regional airplane,” Beaudoin said. “So, when we compete with the CRJ1000, it’s to compete against another regional airplane.
--With assistance from Susanna Ray in Seattle and James Langford in New York. Editors: Niamh Ring, James Callan
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