Reaction To EarningsI don't think we'll see much "gapping up" today. The company's shares are already down slightly in european trading.
Even though earnings came in a penny higher than the concensus of expectations, revenues are down and aerospace can't yet be considered back to normal. Orders remain weak although the fact that cancellations appear to be slowing may be a signal things are stabilizing - albeit at a lower level.
Another big negative is a relatively strong Canadian dollar - especially in comparison to the weakening of european currency in the context of the PIGS (Portugal, Ireland, Greece, Spain) group, and how Bombardier's rail earnings might be negatively affected in future quarters by that development. IE, a weaker Euro means less income when expressed in U.S. and Cdn dollars.
It seems reasonable to expect further production cuts and laoffs. However, if management knows something we don't in terms of expected orders we might not see as much cutting.
The share price is likely to remain weak until new orders are announced. The company appears to be doing everything possible, and then some, in a very difficult market.
Orders will likely remain elusive at least until the economy recovers and airlines see sufficient, persistent demand to facilitate financing. That's why we're only seeing the strongest airlines like Lufthansa, and Republic having the ability to place orders.
Anyone who believes in the company's products should try to ignore the discouraging gyrations in the share price in the short run. Orders for Bombardier's new aircraft such as the CRJ1000, Learjet 85, and CSeries will eventually - inevitably - materialize. It isn't a question of "if", but when.