So, we continue to see momentum in the margin improvement. Sequentially EBITDA margin improved from 12.9% to 14.4% and EBIT margin improved from 6.6% to 8.6%. So, out of the same dollar of revenue the company generates more earnings driven by its cost savings plan and incremental margin improvement on the Global 7500 as Bombardier progress in the learning curve.Īdjusted EBITDA (earnings before interest, taxes and depreciation and amortization) margin increased from 9.8% to 14.4% and adjusted EBIT (earnings before interest and taxes) margin showed a similar improvement. There are some moving objects such as Learjet production termination that pressure revenues, but what we are seeing is that Bombardier is doing much better on its margins metric. The stable revenues in my view are not any reason for concern. For after-market sales, revenues increased roughly four percent, which mostly reflects the continued ramp in services offering and demand for those services. This gives a $12 million increase for Bombardier’s core revenue streams which was partially offset by lower components sales of commercial aircraft programs.Īlso interesting to note is that sequentially, manufacturing revenues decreased from $1.18 billion to $1.07 billion as deliveries tend to be light in the third quarter coming out of the summer. Year-over-year, the share of after-market sales grew from 21% to 26%. The reduction in manufacturing revenues was fully offset by the services segment with a $62 million increase in revenues as Bombardier is ramping up its services footprint and demand for services is increasing based on flight activity. Manufacturing revenues came down by $50 million caused by the production end for the Learjet aircraft, which Bombardier is offsetting with higher medium jet production and lower large business jet deliveries. Stable Revenues, Higher Margins For BombardierĬompared to a year ago, revenues remained stable, increasing by $6 million. So, Bombardier’s improvement on operational level is also reflected in its share prices. The company refocused itself as a business jet manufacturer, a move of which I first was skeptical but Bombardier has exceeded expectations, and as a result, I felt comfortably putting a buy tag on shares of Bombardier in June of this year and that has shown to be the right call so far with a 110% price change and up almost 35% with the broader market losing 3.4% since my September report. Bombardier Stock Surges Leaving Its Past Behind I will also discuss how the current performance stacks against the 2025 targets. In this report, I will analyze the Q3 2022 results, the 2020 guidance and the debt profile. It was a transportation company with a wide product portfolio, but with challenges in all segments most notably in the form of the C Series for which Bombardier had built up significant debt, but would never be able to reap the rewards of the investments made into that platform. When I started covering Bombardier ( TSX: BBD.B:CA) ( OTCQX:BDRBF) years ago, it most certainly was not a company that had my preference for investment.
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