Today's Cannacord Morning CoffeeBombardier (BBD.B : TSX : $3.10), Net Change: 0.18, % Change: 6.16%, Volume: 13,103,300
Everyone has expectations, what are yours? We asked Canaccord Capital Aerospace & Transportation Analyst Bob Fay, “What should we ‘expect’ when Bombardier reports its Q2F04 results today?” Simply put, investors should: (1) Expect reported EPS to be US$0.05 per share. (2) Expect transportation (train division) to be profitable with pre-tax margins of 3.5% – the question is, how profitable was the business given the large charges, write-offs and contract adjustments taken earlier on money losing contracts? (3) Expect decline in aerospace deliveries overall due to regional aircraft – business jets to continue to show modest recovery driven by ramp up of deliveries of new Lear 40 and Challenger 300 business jets. (4) Expect the Street to focus on the company’s balance sheet (net debt position, advances, etc.) given working capital demands. Investors will also be looking at the rating agencies for any changes in their positions. Canaccord Capital continues to rate Bombardier a SELL and has its price target UNDER REVIEW.