Bombardier sees dip in plane deliveries

Bombardier expects a drop in aircraft deliveries and related profit margins in 2012, but the world’s third biggest commercial plane maker said on Thursday it is well positioned for any recovery in the aerospace sector, thanks to a growing number of customers for its new C-Series planes. The Montreal-based plane and train maker, which reported fourth-quarter profit that came in slightly above estimates, said it expects to deliver about 235 planes this year, down from 245 in 2011. “Last year was certainly a very difficult year for aircraft sales for them,” said PI Financial analyst Chris Murray.  “Next year’s going to be more of what they’ve been doing for the last little while.” Bombardier said it expects to deliver 180 business aircraft, such as its Challenger and Global brands, and 55 smaller commercial planes, like its Learjet, in 2012. It delivered 163 business planes and 78 commercial plane in 2011. The aerospace unit’s order backlog reached $22 billion at Dec.31, the division’s new year-end, a 15 per cent increase from $19.2 billion at Jan.31, 2011. The gain reflects an increase in orders for business and C-Series planes that is partly offset by lower orders for turboprops and regional jets, Bombardier said. There is a growing number of customers for its C-Series commercial jetliner, Bombardier said, with firm orders representing two and half years of production. The company says the plane will enter service in late 2013, but there have been doubts in the market that the single-aisle 110-to 149-seater plane, Bombardier’s biggest, will meet its launch date. The company forecast its closely-watched earnings before interest and taxes margin to decline to about 5 per cent in 2012 from 5.8 per cent in 2011. “Generally, sales numbers look okay, but their (plane) deliveries and order book look really soft,” said Morningstar analyst Neal Dihora. “What people are going to ask is are the margins in 2012 going to be lower than 2011 because they don’t have enough volume to go through the system.” UBS associate analyst Hilda Maraachilan, who had estimated an 8.3 per cent 2012 EBIT margin, said the guidance was disappointing. The company said its net profit was $214 million for the fourth quarter, or 12 cents a share, compared with $295 million, or 16 cents a share, a year ago.