RBC : Solid quarter (Quick take)Results above expectations; margins likely reflecting supply chain costs in our view
Sentiment: Positive
Our early take on the results: Q3 results were solid with EBITDA coming in ahead of expectations on stronger revenues driven by mix and robust aftermarket growth up +28% (RBCe: +20%). Margins however came in below Street expectations, which we see as being driven by higher engine related supply chain costs, and we will look to follow up on the call. The company's unit book-to-bill came in at 1.0x and backlog remained stable at $14.7B. Finally, FCF usage came in below expectations on higher inventory build, though the company reiterated the 2024 guide, and overall we are taking a positive view on today's release.
Q3/24 results above expectations. BBD reported EBITDA of $307MM, which was above consensus of $288MM (RBC: $271MM). EBITDA margins came in at 14.8% (down 55 bps y/y) vs cons. at 16.1% and our 15.5%. Revenues for the quarter were $2.1B, up 12% y/y driven by delivery mix and an increase in services revenue, which were up 28%, above our 20% estimate. FCF usage of -$127MM was below consensus of -$-67MM, on inventory investments. Deliveries came in at 30 (vs our 29) and in line with consensus at 30, while the order backlog remain stable at $14.7B (vs $14.9B last quarter) on a book-to-bill of 1.0x, indicating a balanced demand environment. We highlight additional key items in Exhibit 1 comparing the actuals to our and consensus estimates for the quarter