Bombardier on Thursday reported revenue of US$2.3-billion for the three months ended Sept. 30.Christinne Muschi/Reuters
Bombardier Inc. BBD-B-T says demand for its private jets is holding strong as the Canadian plane maker promised a big year end for deliveries and revealed that it’s weighing acquisitions to bolster both its service and defence businesses.
“It’s a very busy and strong market right now for new order activity,” Bombardier chief financial officer Bart Demosky told analysts on a Thursday call to discuss third-quarter earnings. He said 40 per cent of the company’s total deliveries for the year will come in the fourth quarter, including several large-cabin and defence aircraft, which typically command higher prices.
The Montreal-based manufacturer on Thursday reported revenue of US$2.3-billion for the three months ended Sept. 30, which is an 11-per-cent increase over the same quarter in 2024. The company shipped out more Global and Challenger aircraft as compared with last year and generated more sales from repair and service work. It maintained its financial forecast for the full year.
Bombardier to grow private jet aftermarket service across U.S. as company meets high customer demand
Net income from continuing operations came in at US$85-million or $0.77 per share for the latest three-month period, while free cash flow generation improved to US$152-million. Adjusted earnings per share was $1.21, shy of analyst estimates.
Bombardier is among the few companies expressing bullish outlooks as much of corporate Canada gets pounded by U.S. import tariffs, which have resulted in plunging export volumes and growing economic uncertainty. Its backlog of jets that have been ordered but not yet delivered is at a five-year high, climbing by US$500-million during the third quarter to peak at US$16.6-billion.
The plane maker’s executives are also enthusiastic about the prospects for its budding defence business, which are growing brighter as countries boost their military budgets to respond to increasing geopolitical threats. Bombardier is in talks with Sweden’s Saab AB on a joint venture that could see it build Saab’s Gripen fighter jet in Canada under licence, The Globe and Mail reported earlier this month.
Bombardier, Sweden’s Saab in talks to build Gripen fighter jet in Canada
Bombardier chief executive Éric Martel and Mr. Demosky hatched a five-year blueprint for recovery in 2021 that hinged on cementing the company’s share of new aircraft sales, cutting costs, paying down debt and dramatically increasing its aircraft service capability. They’ve delivered on that plan: The company’s stock price has more than doubled over the past year alone.
That financial strength has opened internal talks about merger and acquisitions opportunities, Mr. Martel said on the analyst call. One option would be to build out the company’s network of service centres by buying tooling, hangars or maintenance operators. In 2021, for example, Bombardier gained full ownership of an aircraft service centre in Berlin by buying shares from Lufthansa Technik and ExecuJet Aviation.
Another option is adding to the manufacturer’s defence capability, which is currently focused on modifying passenger jets for military use in intelligence, surveillance and other applications. The company recently won a contract with L3Harris Technologies and other partners to deliver modified Bombardier Global 6500 airborne early warning and control aircraft to the Republic of Korea Air Force.
“There’s very nice opportunities shaping up for the defence business,” Mr. Martel said on the call, cautioning that any takeover deal will not be large; the company is considering incremental purchases.
The company says it expects to be able to hire at least 600 more people in Canada over the next few years.Ryan Remiorz/The Canadian Press
Despite its significant share price surge, “Bombardier’s valuation still has room to further expand,” BMO Capital Markets analyst Fadi Chamoun said in a research note published Oct. 14. “This is underpinned by solid underlying demand fundamentals, disciplined capital allocation (including debt reduction), and expanding free cash flow conversion over the coming years.”
If supply chain challenges ease, Mr. Chamoun sees Bombardier potentially increasing its production rates to respond to the strength in demand – something Mr. Martel confirmed the company is currently analyzing. The plane maker recently won an order for 50 jets worth US$1.7-billion from Bond, a new company backed by private equity firm KKR & Co. Inc. that offers fractional ownership of aircraft.
Bombardier said Tuesday it expects to be able to hire at least 600 more people in Canada over the next few years in the wake of the Carney government’s budget announcement that Ottawa will scrap a federal luxury tax on private jets and other big-ticket items. Mr. Martel had said the tax was hurting the company’s ability to clinch sales and now he sees a “catch-up” opportunity.
With Bombardier generating about US$5-billion of its US$8-billion revenue from U.S.-based customers in 2023, while assembling and shipping out its planes largely from factories in Canada, analysts had warned the company could come under significant pressure in a trade war. But its products remain tariff-free under the Trump administration’s exemption for goods stamped compliant under the United States-Mexico-Canada Agreement.
That could change, however. The U.S. Department of Commerce is now conducting a Section 232 investigation into imports of commercial aircraft and related parts to determine if they threaten national security. According to Washington-based lawyers at Cassidy Levy Kent, the department has until Jan. 26 of next year to finish its work and transmit a report to U.S. President Donald Trump.
Mr. Martel said Bombardier currently does not have an extensive backup plan in the event that new tariffs become a reality. “We haven’t worked on it drastically in terms of being prepared, because our assessment of the risk is low.”