UPDATE 2-Bombardier third-quarter results beat on strong private jet demand
(Adds CEO and CFO comments from analyst call)
By Mehr Bedi and Allison Lampert
Nov 2 (Reuters) - Canada's Bombardier reported third-quarter results on Thursday that beat analysts' estimates, helped by robust demand for pricier business jets and strength in its aftermarket business.
Corporate jet makers continue battling supply chain challenges to try to meet demand from wealthy buyers, following a surge in orders and private flying during the pandemic.
But economic headwinds, and less private flying are raising concerns over flattening demand even as some planemakers aim to produce more jets in the years to come.
North American flight activity fell 4.2% in September 2023 compared with the same month a year earlier, according to Argus International.
Bombardier's order backlog fell to $14.7 billion at the end of the third quarter, from $14.9 billion at the end of the second quarter.
Bombardier Chief Executive Eric Martel told analysts the company would preserve its average order backlog of 18 to 24 months to avoid being left with unsold aircraft.
Martel said Bombardier remains on track to deliver more than 138 aircraft this year. Montreal-based Bombardier has increased inventories to support higher deliveries compared with 123 in 2022.
"Supply chain is difficult, but we are not using it as an excuse for missing our commitments," Chief Financial Officer Bart Demosky said.
Last month, Cessna business jet maker Textron raised its annual profit outlook and said it expects higher deliveries in 2024 as supply chain improves.
Montreal-based Bombardier generated $80 million in free cash, a metric closely watched by investors, in the third quarter, compared with $52 million a year earlier.
Revenue from Bombardier's aftermarket business, which provides maintenance services, rose 11% to $414 million.
Overall revenue increased 28% to $1.86 billion as Bombardier delivered six more business jets in the quarter compared with a year earlier. Analysts were expecting revenue of $1.75 billion, according to LSEG data.
On an adjusted basis, Bombardier earned 73 cents per share, compared with estimates of 46 cents. (Reporting by Mehr Bedi in Bengaluru and Allison Lampert in Montreal; Editing by Shounak Dasgupta and David Evans)
