Transportation giant says orders for trains and large jets boosted by high demand for mass transit in Europe despite debt crisis
December 2, 2011
by The Canadian Press
MONTREAL—Bombardier says the European debt crisis is not stifling demand for its trains and large business jets.
Driven by the need to replace aging trains and growing demand for mass transit, rail tenders are continuing in countries such as Germany, Britain, France and Spain.
Despite financial challenges in Italy, customers for high-speed trains and locomotives have confirmed their orders and said the economic conditions won’t influence deliveries.
In aerospace, European commercial jet orders have slowed, but larger business aircraft are still in demand.
The Montreal-based transportation giant’s profits soared by more than 30 per cent to US$192 million in the third quarter, largely driven by increased sales of large business jets.
The railway division’s strong backlog promises good revenues going forward.
Aerospace deliveries and backlog have increased by 16 per cent since the beginning of the year.
Pierre Beaudoin, Bombardier’s CEO, says a signature of a memorandum of understanding to invest up to $200 million in a manufacturing facility in Morocco illustrates its commitment to continue developing “a global competitive manufacturing footprint.”
The commercial aerospace business has been affected by slow orders for regional jets and Q400s, which has led to production rate decreases.
Bombardier says it delivered 68 aircraft, including 43 business aircraft, during the quarter, compared to 51 planes, including 31 business jets, a year ago.
It also received 34 net orders, 11 more than a year ago.
The total company backlog increased to $55.3 billion, from $52.7 billion a year ago.
The transportation division earned $172 million on $2.3 billion of revenues, representing a 7.4 per cent profit margin. That compared to seven per cent last year.
Aerospace earned $129 million on $2.3 billion of revenues for a 5.6 per cent margin, compared to 5.4 per cent last year.