BBD's Positives And NegativesWell, the results are in and pretty much as expected with no really big surprises in either direction.
In this post I'd like to try to sum up some of the positives and negatives for Bombardier as I see them. As usual, I appreciate hearing your comments on anything you think I've left out or have given too much emphasis:
The Case For The Negative:
* Bombardier continues to struggle against a rising Canadian dollar.
* Aerospace revenue and earnings down
* Business jet market turning around with demand slowly returning.
* Weak fundamentals in regional jet market - orders and deliveries down.
* New RJ competition from Sukhoi, and Mitsubishi
The Positives:
* Aerospace revenue and earnings down, but by some measures not as much as overall industry.
* Business jet market turning around with demand slowly returning.
* If/when currency values show some revision to the norm Bombardier should profit.
* Increasing plant productivity helps ameliorate currency losses.
* Progress increasing market share during the downturn.
* High cash position of $3.4-billion
* Significant backlog of $43.8-billion
* Rail margins continue expanding. Now at 6.2% - exceeding the original goal of 6%.
* Strong world-wide potential for new high-speed rail and commuter rail equipment projects.
* Turboprop demand remains intact.
* Good progress on C Series, Learjet 85, and CRJ1000. New designs which are technologically superior to that of the competition, and which should see strong demand.
* Large new order for C Series from Republic.
* Significant additions to backlog for rail division
* Important deal agreements with Comac (Avic of China)
* Big potential for both rail and aerospace demand from rising economies in emerging growth markets.
* Progress paying down the debt? Recent refinancings should help, and with the high cash position, Bombardier, at least has the ability to pay down a significant portion of its debt.