Canada’s Bombardier Inc. BBD-B-T on Thursday reported a quarterly profit that beat expectations, boosted by demand for flying and maintaining private jets, but it fell short on free cash flow, a metric closely watched by investors.
The Montreal-based business jet maker reported a second-quarter profit of $10-million from continuing operations, compared with a loss of $109-million in the year-earlier period.
The results of corporate jet makers have been powered by sustained demand for private flying over the last few quarters, but companies are wrestling with supply chain challenges that have made it harder to deliver planes.
Bombardier reported a cash burn of $222-million compared with positive free cash flow of $341-million in the same period a year ago, owing to capital expenditures and a buildup in working capital to support higher deliveries.
Analysts polled by Refinitiv had expected negative free cash usage of $171-million.
Shares of Bombardier were down about 8 per cent in early afternoon trading on the Toronto Stock Exchange.
Bombardier chief executive Éric Martel told analysts that despite “pressure points” like some smaller suppliers, the supply chain is improving and will “remain a key area of focus for the foreseeable quarters.”
Last month, Textron raised its full-year adjusted earnings per share forecast on stronger pricing for its business jets and military helicopters.
Bombardier’s after-market revenue, which comes from servicing planes, grew 19 per cent on an annual basis in the second quarter, helping its profitability.
However, there are early signs that demand may be flattening. Bombardier said its backlog at the end of June was up just 0.7 per cent from the end of March at $14.9-billion.
On a per share basis, quarterly adjusted profit was 72 cents, compared with a loss of 48 cents a year earlier. Analysts polled by Refinitiv had expected a profit of 28 cents a share.
Revenue rose 8 per cent to $1.68-billion.
Bombardier said it remains on track to deliver at least 138 jets this year and hit its 2025 targets, which include turning over 150 jets to customers.