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Bombardier Inc. T.BBD.A

Alternate Symbol(s):  BDRPF | T.BBD.PR.B | BDRXF | T.BBD.PR.C | T.BBD.PR.D | BOMBF | BDRAF | T.BBD.B | BDRBF

Bombardier Inc. is a Canada-based manufacturer of business aircraft with a global network of service centers. The Company is focused on designing, manufacturing and servicing business jets. The Company has a worldwide fleet of more than 5,000 aircraft in service with a variety of multinational corporations, charter and fractional ownership providers, governments and private individuals. It operates aerostructure, assembly and completion facilities in Canada, the United States and Mexico. Its robust customer support network services the Learjet, Challenger and Global families of aircraft, and includes facilities in strategic locations in the United States and Canada, as well as in the United Kingdom, Germany, France, Switzerland, Austria, the United Arab Emirates, Singapore, China and Australia. The Company's jets include Challenger 350, Challenger 3500, Challenger 650, Global 5500, Global 6500, Global 7500 and Global 8000.


TSX:BBD.A - Post by User

Bullboard Posts
Post by scissors14on Apr 13, 2007 1:41am
268 Views
Post# 12599362

Stock of the week: Bombardier Inc.

Stock of the week: Bombardier Inc.Stock of the week: Bombardier Inc. -------------------------------------- Bombardier Inc. (TSX-BBD.B, $4.67) did better in fiscal 2007. Its profit margins improved and should continue to do so. Its financial condition is better. And its outlook is positive as a strong rise in orders last year carried over into this year. The shares remain on buy for further gains, provided you can accept volatility and need no dividends. In the year to Jan. 31, Bombardier's pre-tax profit totaled $359 million, or 21 cents a share, excluding one-time items (all figures in U.S. dollars). This is up by half from $238 million, or 14 cents a share, a year earlier. This year, Bombardier should earn net income of 18 cents a share, up from 14 cents a share last year. One thing that improved Bombardier's earnings was higher profit margins in both the aerospace and transportation businesses. In aerospace, the profit margin (before interest and taxes) rose by more than 0.62 percentage points, to 3.91 per cent. In transportation, the profit margin rose by an even more impressive 0.85 percentage points, to 3.87 per cent. Bombardier recognizes that it needs to further raise its profit margins. Accordingly, over the next three years it plans to lift aerospace's profit margin to eight per cent. Over this same time frame, it intends to raise transportation's profit margin to six per cent. Even if the company falls short of these targets, its profit margins should rise. One factor that should increase the profit margins is higher volumes of business. This, of course, spreads fixed costs over a greater number of planes and trains. At the start of fiscal 2008, the aerospace order backlog was up by $2.5 billion, to $13.2 billion, from a year earlier. Similarly, the transportation order backlog jumped by $6.6 billion, to $27.5 billion. Thanks to more orders, Bombardier plans to increase its airplane and train deliveries this year. The upswing in orders has so far carried over into fiscal 2008. Aerospace recently won an order for 30 CRJ900 planes from Delta Airlines. In fact, Bombardier expects the progress in restructuring U.S. airlines will revive orders for its regional jets. Meantime, sales of business and turboprop planes remain strong. The transportation business recently won a $1.6 billion order for trains from Germany. Another plus is that Bombardier's financial condition is improving. Last year, cash flow grew by 10.7 per cent, to $712 million. This greatly exceeded capital spending of $218 million. In fact, the company bought back some of its own shares. Higher cash flow also reduced Bombardier's net debt to cash flow ratio to 1.8 times, including invested collateral. This beats a ratio of 2.8 times at the start of last year. In short, you should buy Bombardier for further gains, provided you can accept volatility and need no dividend income.
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