Bombardier’s quarterly revenue beats on services business boost

Bombardier's third-quarter revenue beat analysts' estimates on Thursday, helped by strong demand for business jet parts and repairs.

But the manufacturer of Challenger and Global jets reported cash burn, a metric closely watched by investors, of $127 million during the quarter, compared with positive cash flow of $80 million in the same period last year.

Shares of Bombardier were down 1.2% in morning trading.

CFO Bart Demosky told analysts he expected strong free cash flow performance in the fourth quarter.

The order backlogs of business jet makers are growing as they benefit from a wave of interest from wealthy travellers and fleet operators that has continued since the COVID-19 pandemic.

“The market is well balanced and is proving to be resilient,” CEO Eric Martel told analysts.

But Montreal-based Bombardier, like other planemakers, continues to wrestle with supply chain snags, particularly on engines, even as Martel said other parts like windshields have improved.

Revenue from the company's services business rose 28% in the third quarter to $528 million.

Bombardier is boosting its aftermarket centres to help it hit a 2025 services revenue target of $2 billion "fairly soon," as it weighs expansion in the key U.S. market, Martel said. The company reported aftermarket revenues of $1.75 billion in 2023.

Bombardier sees upside in services as demand for business jets shifts from smaller to larger cabin planes that are more expensive to maintain, Martel said.

Total revenue for the quarter was $2.07 billion, compared with the average analyst estimate of $1.79 billion, according to data compiled by LSEG.

On an adjusted basis, the company earned 74 cents per share, compared with estimates of 73 cents.

Despite an 18-day strike that ended on July 10 at one of its Canadian facilities, Bombardier delivered 30 jets during the third quarter, compared with 31 aircraft a year earlier.

Bombardier maintained its full year forecast for jet deliveries of 150 to 155 aircraft.