Bombardier Earnings: ‘Good News, Bad Action’ as Shares Sell Off After Solid Report
(Montreal, Canada) Shares of Bombardier, Inc. (TSE: BBD.B) slid more than 14% today (Feb. 8th), closing at $44.45, after the company reported solid earnings - with 2023 revenues of $8 billion up 16% yoy, driven by higher deliveries and business jet aftermarket revenues - albeit slower-than-expected growth.
Bombardier Challenger 3500 photo courtesy of Bombardier.
Bombardier’s earnings report can be found here.
While lower than analysts had predicted, Bombardier’s outlook featured earnings and delivery numbers well above those of 2023, in spite of (1) supply chain issues and (2) soft global demand for business jets, as well as (3) a November letdown when the federal government opted for Boeing Co. in a sole-source deal for military surveillance planes.
The tenets of ‘Good News, Bad Action’ ring a bell in Bombardier’s case: an early warning sign of a short-term correction in a stock is when a company has good news and shares simultaneously act poorly.
“Our Global aircraft broke many speed records in 2023, but those were not the only records we set last year,” said Bombardier’s President and Chief Executive Officer Éric Martel on the earnings call. “Our team came together to deliver the highest revenues and earnings, record aftermarket revenue, and the highest deliveries since we refocused our business in 2021. Our stellar top- and bottom-line performance included the lowest leverage ratio in years.”
Bombardier delivered 138 of its Global and Challenger planes in 2023 (more than 40% in 4Q2023), representing its biggest tally since before Bombardier streamlined its business to become a pure-play private jet maker, according to Bloomberg.
For the coming year, Bombardier forecast 150-155 aircraft deliveries as it looks to navigate hold-ups at select suppliers that continue to persist four years after their onset with the introduction of the COVID-19 pandemic. Bombardier predicted FY2024 revenues of $8.4 billion - $8.6 billion - significantly higher than 2023’s $8 billion reported revenue, which amounted to Bombardier’s third straight year of 16 percent revenue growth.
** Not investment advice; The FLY Report is not a registered investment advisor.