Another opinion.Bombardier numbers
Planes and trains maker Bombardier Inc. (BBD.B-TSE) will announce today the results for its fourth quarter ended Jan. 31. Analysts expect a 24-cents-a-share profit, as does Cameron Doerksen at Dlouhy Merchant Group Inc. Last year's fourth-quarter profit was 25 cents a share. Mr. Doerksen, in a report to clients yesterday, said he'll be looking at four major factors.
First, aerospace margins are a question and Mr. Doerksen said they could fall to 10.4 per cent in the latest quarter on a profit-before-taxes basis, compared with 12 per cent in the fourth quarter last year.
Margins in Bombardier's transportation business are another issue. While they were around 4.5 per cent in the past two quarters, Mr. Doerksen said the latest result likely will fall to 3.3 per cent because of restructuring.
He said he also wants management to "clarify" the $1.4-billion lawsuit against DaimlerChrysler AG over the $1.1-billion purchase last year of rail business Adtranz. "Management's failure to satisfactorily address these concerns could lead to a further erosion of the share price," the analyst wrote. Finally, Mr. Doerksen will listen for additional news on the business jet market outlook for the coming year. He rates Montreal-based Bombardier "buy" and has a 12-month target price of $18 (which he reached by applying a 20-times multiple on its 2003 profit estimate of 90 cents a share). Bombardier rose 30 cents to close at $14.74 yesterday on the Toronto Stock Exchange.
Copyright © 2002 The Globe and Mail
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Good luck to all