Bombardier Inc. T.BBD.A

Bombardier shares ready for PART 2

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Bombardier shares ready for takeoff despite the risks, say analysts
By Ross Marowits, The Canadian Press
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Bombardier Transportation president Andre Navarri has said it has yet to see customers reduce or delay projects.
Still, Nadol said Bombardier stock looks attractive despite the risks that it will be forced to further cut aircraft production soon.
"We see potential catalysts in the coming months in the form of CSeries orders and continued transportation order momentum, which could mitigate concerns about the impact of European macro developments on this business," he wrote.
He said the "solid aerospace margin" increased his confidence that Bombardier will be able to achieve its target of maintain the division margins flat at about five per cent this fiscal year.
Achieving the target depends in part on improved pricing for business jets.
Demand remained weak in the first-quarter with only six net business aircraft orders (22 gross orders and 16 cancellations). That's an improvement from a net loss of 41 orders last year, but unchanged from the fourth quarter.
Bombardier said it expects business jet deliveries will decrease by 15 per cent this year, while it will ship 20 per cent fewer commercial aircraft.
Nadol said Learjets are most vulnerable in the near term to production rate cuts. The 25-month backlog for larger Global Express planes provide a cushion.
He expects business jet deliveries will decrease a further 10 per cent this year beyond the company's forecast and last year's 25 per cent drop.
Aerospace president Guy Hachey said Wednesday it is hoping to sign up new commercial aircraft customers soon that would allow it not to further cut production that would result in more layoffs.
Hachey said it also hopes to sign up one or two additional CSeries customers soon. Analysts believe announcements could come at the Farnborough Air Show in July.
Among the rumoured buyers is Qatar Airways, which has acknowledged that it is in talks with Bombardier, and two Chinese buyers.