The Value Line View of BBD On "timliness" 2 (good), on "Safety" 3 (avg), and on "Technical" a 4 (less than avg).
Long Term Debt $4503 million
Earnings are expected to come in at around 11% per annum over the next 3-to-5 years.
Here's an excerpt from the text:
The market reacted well to Bombardier's third-quarter earnings report. Share net of
.11 was a penny above expectations, and revenues remained solid. The stock was up about 5% on the day its earnings were released.
The company is in the process of switching from Canadian GAAP to IFRS. The full imnplications of this switch should become clear by the end of the fiscal year. For now we estimate significantly lower shoreholders equity, largely because of adjustments relating to retirement benefits. The company is switching its Aerospace reporting fiscal yearend to December 31st to align with Transportation's fiscal yearend. consequently, we have lowered fourth-quarter revenue expectations somewhat. We still estimate a 2011 share net of roughly 45 cents.
The aerospace business is bouncing back nicely, led by commercial jet sales. Aerospace revenues were up 26% over last year. In contrast, Transportation revenues increased 3% during this time. Margins improved in both segments.
Management has not shed much new light on the bold, new Cseries project since our last report, and this is its most crucial initiative. For the time being, it appears that the project is gradually gaining momentum with new orders. Though company cash flows remain in the red as it invests in new projects, the Aerospace segment actually generated $52 million, which is a heatening sign. The plane's miaiden flight is expected in 2012, and delivery in late 2013.
Bombardier's Cseries may face competition from Brazilian plane maker Embraer' larger airplanes or Boeing's or Airbus' smaller ones. Although management maintains that the Cseries is a fuel-efficient, economic, and above all, distinctive model, doubts remain. Airlines may opt for less expensive models from the competition. For now Bombardier has a low P/E ratio and a steady transportation business to fall back on. The CSeries does occupy a unique niche as a fuel-efficient plane with a single aisle that sits 100-to-150 people. For this reason, adventurous investors with patience may want to get into this timely equity before the Cseries takes off.
Financial strength B
Stock's Price Stability 45
Price Growth Persistence 35
Earnings Predictability 45
Note, (my comments - not Value Line'): these are all fairly low with the exception of "financial strength". The B rating appears modest given the company's still fairly high debt load, although presumably some of Bombardier's fairly large cash hoard will be divided between this, and the ongoing pension obligations along with the development of new products ).