Bombardier Inc.is pushing back the commercial debut of its Global 7000 business jet by two years, yet another setback for a planemaker that has seen debt balloon due to delays with the CSeries commercial program.
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On an adjusted basis, Bombardier said it earned $145 million or six cents per share, down from $192 million or 10 cents per share a year ago.
In May, Bombardier announced it would cut more than 1,750 employees in Canada and Northern Ireland as it reduced production of its Global 5000 and 6000 business jets, an action that Bellemare said Thursday was necessary because of the market softness. In May, Bombardier CEO Alain Bellemare said he was considering either a joint venture or partial sale of the company’s rail unit, in addition to an IPO for a minority spinoff, but dismissed speculation that the entire rail business was for sale. While the 7000 was scheduled to be delivered some time in 2016 and the 8000 in 2017, both long range jets have been delayed until the second half of 2018.
Some analysts had suggested a delay was likely, as the plane has yet to make its first flight.
Bombardier is targeting annual sales of $2 billion to $3 billion from the Global 7000 and 8000 programs over a five-year period following the aircraft’s entry into service, according to a March 2014 presentation to investors.
The business jet division has been a key source of cash flow for the company, which is spending heavily to develop its CSeries narrow-body, medium-range jet.
The Global announcement came as Bombardier reported second-quarter earnings, excluding some items, were 6 cents a share, beating the 5-cent average of analyst estimates compiled by Bloomberg.
Montreal-based transportation conglomerate Bombardier is denying a published report that the company is in discussions to merge its rail business with German firm Siemens.
The Canadian parent of Wichita’s Learjet said revenue for the quarter ended June 30 was $4.6 billion, compared with $4.9 billion in the same quarter a year ago.
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Bombardier’s shares closed at C$1.95 on the Toronto Stock Exchange on Wednesday. Siemens, meanwhile, is set to report earnings on Wednesday that analysts expect will show a profit decline of about 25 per cent.
