Bombardier Inc. T.BBD.A

Q1 - some good, some bad

[Snowey]

I was disappointed with EPS of only $0.36 which is (66%) drop from Q1 last year. Poor.
 
The increase in Backlog to $14.9 is very welcome news, but I don’t understand. I thought that when they got new orders, they got a big deposit which improved FCF and they could use to pay down debt. But the FCF usage was negative ($387). Poor. And nothing was applied to debt in Q1. Any comments on this welcome.
 
The aftermarket business looks excellent going forward with good and improving margins. And defense sector can be another winner.
 
The market focused on management commentary and promises of stronger margin growth overall for the year. Market is always forward looking, as the fella said.
 
Hold on to your shares. I think it will be a good year. My target for year is $87.
 
All the best.
 
Snowey.

[Tempo1]

The lower EPS are a non event. Last year they are boosted by a net gain of financial instruments, a one time event. They are not related with the normal operations, it's an extraordinary gain that will not come again. Fine for last year, but you can't add them in the comparaison. Then the FCF, Yes the 12 more orders bring more cash deposits and that, with the help of the manufacturing

[Snowey]

Hi Tempo1,   Thanks for your feedback on EPS and FCF. Helps.   All the best   Snowey.

[Nordico]

The .36 EPS he mentioned is the adjusted figure, so one-time events are not included. The reason adjusted EPS was so much less than Q1 last year was because of (a) much higher proportion of Challenger deliveries than Globals, compared to last year's higher proportion of Globals to Challengers, and (b) the 2 less deliveries than last year, which will even out in later quarters.

[Tempo1]

You are right; the one time event are not in the adjusted EPS, but the consequence of them are in. But you are wrong for the product mix" . The Gross margin, the EBIT and the adjusted EBITDA are almost the same even if we had 200 M$ less sales.  So, the mix or whatever have given positive results not less. The difference are caused by the taxes recuperation indirectly caused by the

[Nordico]

Huh, how am I "wrong" re: the product mix? Globals are higher profit margin than Challengers; Bomber delivered 8 Challengers and 14 Globals last year's Q1, and this year it was 12 Challengers and 8 Globals - hence the big difference in adjusted earnings. You aren't going to have higher profit from delivering a much higher proportion of Challengers than Globals.

[Tempo1]

Sorry but look at the numbers not at your toughs.  -  Gross margin is 280 M$ VS 295 M$ last year. -  The EBIT was 144 M$ this year VS 140 M$ last year. -  Adjusted EBITDA was 212 M$ last year VS 204 M$ this year. The gross margin at 21,9% is better than last year (20,3%).  Even with 172 M$ less sales. The reality is that the operations gave almost the same level of

[Nordico]

I see what you're saying and concede/concur the difference in tax recovery is the more signficant reason for the difference in adjusted EPS. That's odd that adjusted EPS doesn't adjust out a resulting tax recovery from a one-time gain on financial instruments. Re: Gross margin, EBIT and adjusted EBITDA being similar YoY, I note Bomber increased its service revenues (high margin

[Tempo1]

You force me to look at the results in details. My first explanation was inaccurate.  What a wonderfull quarter we had ! Good luck.

[Nordico]

Heh ditto - I hadn't actually looked through the earnings report itself until tonight. Your explanation was more relevant/accurate than mine, and I was too eager to try to correct when I posted. The tax aspect and explanation of the adjusted EPS figures does reveal the Q1 performance was quite good; most definitely.

[bbdmic]

Snowey please read the page 16. they paid 100M$.  

[Snowey]

Hi bbdmic, Seems to me that belongs in Q2 (April), not Q1 (Jan Feb Mar) Regards... Snowey

[bbdmic]

100% right read that but didn't notice it.