RE:Fed UpDear fed up,
Let's keep in mind that BBD traded @ $4.50 or so only 2 months ago. Depending on your investment goal, it may be another chance to buy shares at a really good price. BBD has on average delivered +/- 250 planes annually and now that executive / business jets are again a hot commodity, the current backlog for aerospace only is about $28B.
Keep in mind the lenght of time required for such large new projects as the c-series - it requires 5-7 years+ of intense capital spending - about $4B so far (public funds $448m). The recent first flight was a good milestone, albeit months behind schedule. Missing Q3 consensus by 1 cent at this juncture is not a big deal, especially in the context of the company's ongoing huge R&D expenditures on the aerospace side. (R&D expenditure = $2B in 2012 only). Net profit margins do need to improve nonetheless (that missing 1 cent), is a manageable ongoing issue for most companies.
Another bloger reminded me of a recent (last 12 months) encounter with RBC Capital people and BBD (along with US interests) wanting to discuss spinning-off BBD's rail division as a seperate entity, at $3.50 a share. (split BBD into 2 distinct corp. - BBD's people said they didn't want to split up the company, unless there was a business case to do so ex. an aquisision). The point is that serious number crunchers would have been happy to acquirer BBD's rail division only, for $3.50 per share.
In other words, at current share price of about +/- $4.50, one buys the aerospace business for +/- $1. That's considerable leverage since the near term big profit growth is to come from the aerospace side. Yes, it's been a painfully lenghty process to own BBD shares (+/- dead money unless traded).
Look for those c-series orders, and I suspect they will come in, once the plane's proven itself and deliveries begin in 2015. A very similar pattern as what happened in the 1990s.
Anyone who owned BBD shares in the early to mid 90s will remember the long / extended time period, building up to Reginal Jet deliveries (in early 90s, most people didn't know what a regional jet was). It took years, but when the profit picture finally exploded upwards, so did the shares. There were many really good years and many who owned BBD shares made out really well, in some cases a 10 + baggers in less than 10 years.
But, for the ones who bought in late (late 1999 early 2000) ended-up loosing big time (if they held the shares - no wonder so many love to hate BBD). Buying the German rail company was hard to digest in a down market (2001-2).The board of directors at the time had also previously approuved BBD Capital's lending mandate (to be like GE in commercial lending) with an eventual real estate loans blow-up (ended in a disaster writting-off billions of profits made from the RJ's huge success), leaving the balance sheet even more vulnerable.............
It's now more than 10-12 years later, new management and board of directors. All more astute and truly business oriented, with a big 6-7 year old "game changing" project in the c-series. Sure there is lots of competition. Keep in mind that Bombardier, despite many internal & external challenges, has always delivered a top quality leading product.,
There remain a lot of room for BBD to contimnue to grow from here. Look around at earnings estimates and you might be surprised. There is lots of room for the company to grab its share of a large market in which I suspect, the company will continue to lead.
Good luck, Acuras 1