MONTREAL — First-quarter earnings slipped at plane and train maker Bombardier Inc. because of a 21-day strike at its aerospace division and weaker deliveries of business aircraft, the company said on Tuesday.
According to a wire service, Bombardier, the world’s largest passenger train maker and the No. 3 manufacturer of civil aircraft, said it earned C$219.2 million ($143 million), or 15 Canadian cents a share, in the quarter ended April 30. That compared with a profit of C$241.0 million, or 17 Canadian cents a share, in the year-earlier period.
The consensus estimate of nine analysts polled by Thomson Financial/First call was for a first quarter profit of 16 Canadian cents a share.
The Canadian group said the production delays caused by the strike at its aerospace plants in Montreal shaved C$42 million, or 2 Canadian cents a share, off its first-quarter earnings.
The company said the strike would also hurt second-quarter earnings by the same amount, but it reaffirmed its earnings per share growth target of 10 percent for the year.
More than 7,000 workers at the three Montreal area jet plants went on strike from April 15 to May 5 to press demands for higher wages, shutting down production of the company’s top-selling Canadair Regional Jet (CRJ).
“We are taking every measure to recover time lost during the strike,” Bombardier’s president and chief executive, Robert Brown, said in a conference call.
“Some CRJ deliveries have been delayed by up to a month, but, at this time, we are confident of achieving our target of approximately 190 CRJ deliveries for the year,” Brown said.
Sales totaled C$5.5 billion versus C$4.0 billion, and the order backlog increased to C$44.9 billion from C$32.6 billion in large part because of business brought by the acquisition of railcar maker Adtranz from DaimlerChrysler AG (XETRA:DCXGn.DE – News).
Bombardier jet business usually contributes to most of the company’s profit, but the strike’s fallout was partly offset by improved income from its train, recreational and capital units.
Bombardier’s aerospace division saw it pretax income plunge 39 percent to C$190.7 million from C$310.2 million, while revenues remained stable at C$2.6 billion. Apart from the strike, the profit slide was caused by a change in the mix of aircraft deliveries, lower margins on used aircraft sales and higher interest expenses, the company said.
Business aircraft deliveries fell to 28 from 44 in the year-earlier period, while regional jet deliveries decreased to 37 from 39.
“The business aircraft market have yet to recover from the slowdown in the U.S. economy,” Brown said.
Bombardier’s transport division posted a pretax income of C$90.6 million, up more than threefold from a year-earlier C$26.4 million. Transport revenues surged to C$2.3 billion from C$840.7 million.
The recreational products unit, which makes the well-known Ski-Doo snowmobiles as well as personal watercraft, produced pretax income of C$26.7 million, up from C$19.0 million in the year-earlier quarter, while revenues improved to C$460.0 million from C$370.1 million.
Bombardier Capital generated pretax income of C$20.6 million, up from C$3.0 million, despite revenues slipping to C$192.0 million from C$256.8 million.
Bombardier’s class B shares closed down 15 Canadian cents at C$14.85 on Tuesday. The stock has recovered from a low of C$9.19 hit after the Sept. 11 attacks on the United States by hijacked airliners, but the stock has slipped back after cresting at C$17 in early January.