Bombardier Inc.’s net profit fell 93 per cent in the fourth quarter as the plane and train maker booked a $119-million (U.S.) restructuring charge.
The Montreal-based company said fourth-quarter net profit was $14-million or nil earnings per share, compared with $214-million or 12 cents per share in the year-earlier period.
Net profit on an adjusted basis was $188-million or 10 cents per share in the fourth quarter, down from $277-million or 13 cents.
Analysts’ consensus estimate for fourth-quarter EPS was 12 cents.
Revenue increased to $4.8-billion from $4.3-billion.
For the year, revenue dipped to $16.8-billion from $18.3-billion and adjusted net profit fell to $692-million or 38 cents, compared with $865-million or 48 cents.
“Our results for 2012 are not reflective of our potential,” Bombardier president and chief executive officer Pierre Beaudoin said in a news release Thursday.
“After proving our resilience throughout the economic crisis, today, Bombardier is at a turning point. With our outstanding backlog of $66.6-billion, an increase of 19 per cent over last year, we’re forging ahead with breakthrough products and expanding our reach in pivotal growth markets.”
Free cash flow in the three-month period ended Dec. 31, 2012 was $850-million, up from $590-million in the same period for the previous year.
In aerospace, Bombardier’s fourth-quarter revenue reached $2.6-billion, compared with $2-billion. The margin slipped to 3.4 per cent from 6.3 per cent in the year-earlier period.
Bombardier Aerospace’s backlog rose 38 per cent to $32.9-billion at the end of 2012, from $23.9-billion at Dec. 31, 2011.
Desjardins Securities analyst Benoit Poirier said in a research note Thursday that Bombardier’s overall fourth-quarter results came in below expectations, but that the outlook is strong.
The company said it expects to deliver 245 jets - 190 business and 55 commercial - in 2013, up from a total of 233 in 2011.
“We continue to believe that [Bombardier’s] shares represent attractive value for long-term investors,” he said.
The company also said development of its new Learjet 85 business jet has been delayed due to a series of technology-related problems. The jet’s entry-into-service is now scheduled for the summer of 2014 rather than for the end of this year as previously planned.
The company said the Pratt & Whitney geared turbofan engine for its all-new C Series transatlantic jet received Transport Canada certification this month.
The plane’s first flight is on track for the end of June, said Bombardier.
Bombardier said on Wednesday it is closing in on a firm order for as many as 42 C Series aircraft – worth up to $3.42-billion – from Russian leasing firm Ilyushin Finance Co. That’s up from Ilyushin’s August 2011 letter of intent to purchase 10 C Series planes with options to buy another 20.
On the rail side, Bombardier Transportation’s revenue slipped slightly to $2.2-billion in the fourth quarter, compared with $2.3-billion in the same period last year. The margin fell to 4 per cent from 7.2 per cent.
National Bank Financial analyst Cameron Doerksen said in a note that, while weak fourth-quarter margins in both the aerospace and rail divisions are a letdown, lower-than-anticipated guidance for 2013 is the real concern.
“Although weak margins in both segments in Q4 are clearly going to be disappointing to the market, we think that the more important driver for the stock today will be the soft margin guidance for 2013,” he said.
Management said on a conference call that the aerospace margin in 2013 will likely be about the same as the 4.7 per cent posted in 2012 but is expected to reach 8 per cent in 2014.
At Bombardier Transportation, a restructuring charge of $119-million was booked in the quarter in connection with a plant closing and the slashing of about 1,200 jobs.
BT’s order backlog at Dec. 31, 2012 was at a record $33.7-billion, up from $31.9-billion.Report Typo/Error