Bombardier Posts Higher Profit, To Cut More Jobs

Bombardier reported a better-than-expected quarterly profit on Thursday, but said it would cut another 3,000 jobs and scale back production of its business jets this year due to dwindling orders.

The job cuts will take place at facilities in Canada, the United States, Mexico and Northern Ireland by the end of 2009 and result in severance costs of about USD$30 million, said Bombardier, the world's No. 3 civil aircraft manufacturer.

The job losses are in addition to the 1,360 layoffs announced February 5, when the company adjusted production rates of its Learjet and Challenger aircraft.

Demand for business planes deteriorated rapidly in the last six months of 2008 and is likely to remain weak for the foreseeable future, Bombardier said.

The company now expects to deliver 25 percent fewer business planes this fiscal year, but repeated its forecast for a 10 percent increase in commercial plane delivery.

PROFIT, SALES HIGHER

Bombardier said net income rose 42 percent to USD$309 million, or 17 cents per share, in the fourth quarter ended January 31 from USD$218 million, or 12 cents per share, a year earlier.

Revenue rose to USD$5.4 billion from USD$5.3 billion.

Aerospace unit revenue slipped to USD$2.8 billion from USD$2.9 billion. Business plane deliveries declined 19 percent to 93 aircraft, and orders in the quarter sank to 6 from 213 a year earlier as the economic crisis weighed on demand.

Until markets return to normal, margins on earnings before interest and tax will suffer at the aerospace unit, Bombardier said. The company maintained its target of a 12 percent EBIT margin by fiscal 2013.

The company said it had USD$3.5 billion in cash and cash equivalents and no significant long-term debt maturing before fiscal year 2013.