(The Canadian Press circulated the following story on August 25.)
MONTREAL — Transportation giant Bombardier Inc. says its second-quarter profit slid to $23 million US from $68 million US a year ago, but showed a sharp improvement from the first quarter’s $174-million-US loss.
Earnings for the quarter ended July 31 amounted to one cent a share, compared with four cents per share a year earlier, the global Montreal-based company (TSX:BBD.B) reported Wednesday.
Revenue climbed to $3.9 billion US from $3.8 billion US, led by the railway equipment division. Bombardier reports in U.S. dollars.
Railway-focused Bombardier Transportation’s revenue rose to $1.85 billion US from $1.69 billion US, while Bombardier Aerospace’s revenue dipped to $1.95 billion US from $2.05 billion US.
“Overall, we are where we expected to be at this most challenging and crucial phase of our three-year plan,” CEO Paul Tellier said in a release.
“We are back in the black, our free cash flow performance is significantly improved over what it was last year, we have a sound balance sheet, access to strong capital resources and therefore, strong liquidity.”
In the first quarter, $200 million US in cost overruns on contracts with Bombardier’s Europe-based rail division led to a $174-million-US loss even as revenue rose to $3.5 billion US from $3.3 billion US.
Tellier has cut about 10,000 jobs and taken other drastic measures to turn around the company since he was brought in as CEO less than two years ago.
In one dramatic move, the recreational products division -home of the pioneering Ski-Doo snowmobile -was sold last December.
And in March, Tellier announced 6,600 jobs would be cut from Bombardier Transportation, mainly in Europe, due to overcapacity. Two plants have also been closed in North America, including one in Kingston, announced Monday.
In the first-quarter earnings conference call with analysts in May, Tellier also announced 500 job cuts in the aerospace division.
“The Transportation segment has regained profitability by focusing intensely on project management and executing the restructuring plan,” Tellier said Wednesday.
“In Aerospace, we are benefiting from a diverse product line. We capitalized on a significant improvement in the business jet market, which helps meet the challenges in the regional aircraft business -and we will deliver a similar number of aircraft this year as we did last year.”
In a Transportation shakeup in Europe, Bombardier’s plant in Amadora, Portugal, was closed on May 25 and the Doncaster, England, factory was closed June 25 -six months earlier than expected.
Workforce reductions in the division now total 1,500 employees, half of the target total for this year.
Bombardier said its order backlog totalled $32.9 billion US as of July 31, compared with $34.6 billion a year earlier.
The company’s common shares were up six cents at $2.98 on Tuesday, compared with $7 earlier this year and the all-time high of $26.70 in 2000.