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Bombardier downgrades 2019 financial outlook

Bombardier attributes a $250 million fall in forecast full-year revenue from its commercial aviation business to a pair of divestments which are scheduled to close earlier than anticipated.

In its preliminary first-quarter results, released on 26 April, the Canadian airframer lowered turnover guidance for the commercial aviation unit to around $1.15 billion.

That move is a consequence of earlier than anticipated sales of its business aviation training activities to CAE and of its Q400 programme to Viking Air.

Bombardier previously expected the sale of both businesses to conclude in the second half of 2019. However, CAE's acquisition closed on 14 March, and the turboprop programme will be divested around mid-year.

The manufacturer has not changed its guidance for the commercial aviation segment’s adjusted earnings before interest and tax (EBIT), and still expects a $250 million operating loss.

No changes were made to the guidance for manufacturer’s other aerospace divisions.

For the business aircraft division, Bombardier forecasts sales worth $6.25 billion, while the aerostructures and engineering services unit will generate $2.25-2.5 billion this year.

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The planned sale of Bombardier's Q400 programme to Viking Air is set to be completed around mid-year

During the first quarter, the company’s commercial aircraft division delivered three CRJs and a single Q400, and received orders for 16 aircraft.

The segment generated an adjusted EBIT of $22 million on revenue of around $240 million.

Aerostructures and engineering services delivered an adjusted EBIT of $66 million on sales of $470 million, while business aircraft generated revenue of around $970 million and an adjusted EBIT of $74 million.

Bombardier chief executive Alain Bellemare states that the timing of aircraft deliveries were a factor in the company’s “soft” first-quarter results – alongside exchange rate headwinds and production issues in the group’s rail transportation business.

As a result of the Q400 sale, the manufacturer now expects to deliver 30 rather than 35 commercial aircraft in 2019.

Bellemare insists, however, that “the transformation of our aerospace businesses remains fully on track”.

He says: “The major risks have been retired, our growth programmes are in service, and our aftermarket strategy is well underway.”

Bombardier’s overall first-quarter revenue will be around $3.5 billion and adjusted EBIT around $170 million.

For the full year, the company foresees total revenues of around $17 billion – $1 billion less than previously targeted – while adjusted EBIT is set to reach $1-1.15 billion, down on the $1.15-1.25 billion previously forecast.

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