Workers apply a Rolls-Royce decal to the engine of a Bombardier Global 6500 jet at the National Business Aviation Association exhibition in Las Vegas on Oct. 21, 2019.David Becker/Reuters
Bombardier Inc said on Monday it expects first-quarter business jet revenue to come in ahead of analysts’ estimates, as rising vaccinations encourage wealthy travelers to return to flying.
The company’s shares rose 4 per cent in early trading.
Business jet makers are seen benefiting as more people start flying mainly for leisure purposes following easing of coronavirus-led restrictions.
The Montreal-based maker’s U.S. rival Textron Inc last week posted better-than-expected results, propelled by a rebound in demand for its small and medium business jets.
Bombardier, the maker of Global aircraft, said it expects first-quarter adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) from continuing operations of $123 million, above analysts’ average estimate of $89 million, according to IBES data from Refinitiv.
The company, which has cut thousands of jobs to save costs, will report results on Thursday.
Bombardier said its first-quarter business aircraft deliveries would be 26 planes, the same number it delivered in the year-ago quarter.
While deliveries are roughly the same, Bombardier’s product composition is shifting toward the higher priced Global 7500 jets, which are a revenue driver.
The company expects business jet revenue to rise by 18 per cent to $1.3 billion in the first quarter, from a year ago, beating Wall Street’s estimate of $1.18 billion.
Bombardier said it remains on track to deliver between 110-120 business aircraft in 2021. The company’s full-year deliveries fell 20 per cent to 114 jets in 2020.
Separately, the company on Monday launched consent solicitations with respect to its outstanding senior notes or debentures.
Bombardier said it received a letter in April from counsel to a holder of a certain series of notes, claiming that the company’s divestitures of non-core assets, including its transportation business, regional jet program and aerostructures unit, constitute a breach of certain covenants.
Bombardier said it believes that these allegations are without merit and that it has not breached any covenant.
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