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A Bombardier Q400 jet sits in a hangar at the Bombardier facility in Toronto, on Wednesday July 25, 2012.Aaron Vincent Elkaim/The Canadian Press

Investors have found yet another reason to dislike Bombardier Inc.: its train business.

Bombardier on Tuesday delivered the 10 cent (U.S.) profit per share that investors had expected in its second quarter – albeit a 14 per cent annual drop after the company slashed its profit forecast earlier this year and led analysts to lower their expectations.

Senior management offered reassurances that the Montreal transportation giant remains on track to get its 100-plus seat commercial airliner, the C Series, into service by the end of 2013, despite widespread concerns the plane will be a weak contributor to the firm's financial health. The company talked up demand for its once mighty regional airliner business, which logged an anemic 12 plane orders in the quarter ended June 30 – unchanged from the same period last year, amid ongoing economic uncertainty.

But after dropping 8 per cent so far this year, Bombardier stock dipped a further 2.3 per cent in trading Thursday. The reason, said analysts, was unexpectedly disappointing results out of Bombardier's passenger railcar division. Revenue there was just $1.9-billion in the quarter ended June 30, down 28 per cent from the same period a year earlier and the weakest performance in nearly five years. That led to a worse-than-expected $4.2-billion in revenue for the company, down 12 per cent from a year ago.

Bombardier said timing was a factor in the shortfall as it completed some major train contracts while others were just starting up, and noted it booked a healthy $2.9-billion in new train orders in the quarter. But some analysts wondered whether it was having chronic difficulties with challenging train contracts that were continuing to drag on profits.

"I think there are concerns in [the railcar division] that may linger for some time," PI Financial analyst Chris Murray said.

Further adding to concerns were the company's top executives, who seemed to shy away from their forecast that the railcar division would earn an operating profit of 8 cents on the dollar next year and said the market for new locomotives wasn't picking up as fast as anticipated. Asked on a conference call whether Bombardier was sticking to its profit target for next year, chief financial officer Pierre Alary would only say the company would review its forecasts in early 2013 and "for the time being our 8 per cent guidance continues to be in effect."

That gave the market little confidence, particularly after analysts noted the division earned just a 4.9 per cent profit in the quarter, excluding one-time items.

"Certainly I don't think that level of comfort is as strong as it once was," Mr. Murray said, while National Bank Financial analyst Cameron Doerksen cut his share price target to $4.50 from $5.

Bombardier also faced questions about its risky push into the market for transcontinental airliners with 100 or more seats, where it will be battling for sales against giants Boeing Co., Airbus SAS and others. Bombardier, which is spending $2-billion, or half its cash reserves, on plane development this year, said most systems are up and running on its pre-flight test C Series plane and it is on track to complete the first test flight by the end of 2012 and for the jet to enter service a year later.

Analysts have speculated those targets could be pushed back by several months, a possibility chief executive officer Pierre Beaudoin acknowledged on the conference call, while sticking to his targets.

Byron Capital Markets analyst Tom Astle also said in a note the company's balance sheet is weakening and that it could struggle to meet its pledge to equal the $18-billion in revenue it earned in 2011 this year.

The company's bright spot remained its private jet business, which booked 134 net new orders in the quarter, including one for 100 Challengers from NetJets Inc., owned by Warren Buffett's Berkshire Hathaway conglomerate.