Canadian manufacturer Bombardier reported a consolidated net loss of US$94 million for the third quarter of 2016, narrowed from the company's consolidated US$4.9 billion net loss in 3Q 2015.
Third-quarter consolidated revenue was US$3.7 billion, down 9.7% from US$4.1 billion; expenses totaled US$3.4 billion, down 9.9% year-over-year (YOY), leaving an operating profit of US$384 million, down 7.9% from US$417 million in 3Q 2015.
For Bombardier's commercial aircraft sector, revenue in the 2016 third quarter was US$538 million, a 12.1% increase over US$480 million in 3Q 2015.
"We continue to gain momentum as we execute our turnaround plan and transform our company," Bombardier president and CEO Alain Bellemare said.
"We remain focused on improving operational efficiency ... ramping up our new programs and maintaining a disciplined and proactive approach to deliver value to customers and shareholders in any market development."
Bombardier said the US$58 million increase in third-quarter revenue was mainly because of higher revenues from sales of new and pre-owned aircraft. The manufacturer posted orders for three Q400s for the third quarter, but the total for the quarter was a net negative nine orders following the company's August restructuring of a purchase agreement with Moscow-based lessor Ilyushin Finance Co., (IFC). IFC modified its original 2013 firm order for 32 CS300s with options for an additional 10 aircraft to 20 CS300s and one Q400 turboprop with options for five additional Q400s.
Subsequent to the quarter's end, Philippine Airlines signed a letter of intent to acquire up to 12 Q400 regional turboprops, valued at US$375.6 million at list prices.
In September, Bombardier adjusted the full-year delivery forecast for CSeries aircraft downward, from 15 to seven aircraft, citing Pratt & Whitney PW1500G geared turbofan (GTF) engine delivery delays.
"Mainly as a result of this delivery adjustment, we updated commercial aircraft delivery guidance for full year 2016 to between 85 to 90 aircraft [down from 95 deliveries] and our free cash flow usage target for the CSeries aircraft program in 2016 is now approximately US$1.15 billion, of which US$830 million has been spent in the first nine months," Bombardier said. "We now expect total commercial aircraft revenues in 2016 of approximately US$2.7 billion."
The manufacturer delivered 16 commercial aircraft during the quarter, up from 14 in 3Q 2015. Deliveries included nine Q400s, five CRJ900 regional jets, one CRJ 1000 regional jet and one CS100, the first CSeries aircraft to enter service, to launch customer Swiss International Air Lines (SWISS). As of Nov. 10, SWISS has three CS100 aircraft in service.
Bombardier's CS300 model obtained type certification from Transport Canada on July 11, followed by EASA certification on Oct. 7. Both regulators also conducted operational evaluations of the CS300, validating that the aircraft is suitable for entry into service, Bombardier said. FAA validation of the type is expected during the 2016 fourth quarter, Bombardier said, adding the first CS300 destined for launch operator Air Baltic is in production and delivery is scheduled to take place in the coming weeks.
Also in September, Bombardier received the second and final installment (US$500 million) of the US$1 billion investment from the government of Québec supporting the manufacturer's CSeries program. The program was established in June as the CSeries Aircraft Limited Partnership, which is 50.5% owned by Bombardier and 49.5% owned by Québec.
