Bombardier unfazed by economy as Q3 profit hits $245M US

Bombardier Inc. reported a big jump in third-quarter profit Thursday to $245 million US, up from $91 million for the same period a year ago.

Earnings amounted to 14 cents per share, compared with five cents last year. The Montreal-based manufacturer of aircraft and trains reports in U.S. dollars.

Bombardier said revenue increased to $4.57 billion from $4.23 billion in the same quarter a year ago.

The company said it's in a good position to weather a global economic slowdown and is optimistic about the long-term outlook.

"We do expect that the current economic conditions will slow down the orders, but we have a strong backlog in all of our product lines and we feel we're in good position to face the current market turmoil," CEO Pierre Beaudoin said in a conference call with analysts.

Bombardier ended the quarter with $3.3 billion in cash, down from $3.6 billion at the start of the financial year, after a $495-million nine-month downward adjustment caused by the strengthening U.S. dollar.

The company's overall backlog stood at $51.9 billion, down from $53.6 billion at Jan. 31, again because of currency effects.

Beaudoin said both Bombardier Aerospace and the Bombardier Transportation train division increased their profit margins during the quarter and continued to invest in new products and technologies.

Order backlog equals 2.7 years of revenue

He noted that the backlog represents 2.7 years of revenue, "spread across all businesses and geographies," and Bombardier has no significant long-term debt maturing before 2012.

After achieving an eight per cent operating profit margin, the aerospace division is aiming to increase it to 12 per cent by 2013.

"Setting a goal like this in a time like we're going through today is quite challenging, obviously, but in setting this goal, we assumed normal market conditions would prevail in the medium and long term," said division president Guy Hachey.

Business jet orders are expected to decrease next year with a gradual recovery in the following two years. Commercial airliner orders are forecast to remain near the current pace.

Bombardier Transportation expects to be insulated from a global economic slump because many of its projects are funded by large public-sector entities.

"We are operating in a robust market, supported by public spending on rail which may even increase short-term in some countries by specific stimulus packages such as in the U.K. or in China," said rail division president Andre Navarri.

Shares of Bombardierclosed upthree cents to $3.92on the Toronto Stock Exchangeon Thursday.