Bombardier Aerospace delivers 302 aircraft in fiscal 2009, down from 2008

MONTREAL - Bombardier Aerospace (TSX:BBD.B) surprised industry observers Friday by announcing a lower-than-expected drop in aircraft deliveries last year as it winged its way through the worst of the recession.
The Montreal-based manufacturer said it delivered 302 planes in the fiscal year ended Jan. 31, down 13 per cent from 349 deliveries in fiscal 2008 but still ahead of expectations.
The company's business jets were hit the hardest, with a 25 per cent drop to 176 deliveries. Bombardier said it believes deliveries for business aircraft will continue to decline this year by another 15 per cent.
Commercial aircraft deliveries were 10 per cent higher, with 121 deliveries over the year - 11 more than in 2008. The company said it expects commercial jet deliveries will fall 20 per cent this year.
"The global economic crisis, which began in 2008, continued to impact the civil aviation industry throughout 2009 as conditions remained challenging," Bombardier Aerospace president and chief operating officer Guy Hachey said in a release.
"While indicators of market stabilization have started to emerge, we remain cautious as economic uncertainty still prevails."
Overall, Bombardier delivered 44 Learjets, 50 Globals and 82 Challengers over the year.
The higher-than-expected number of mid-size Challenger deliveries should help margins, said analyst David Newman of National Bank Financial.
But, observers fear margins will still be under significant pressure because of lower volumes and prices.
Net orders for the year were 11 as 197 new orders were offset by 186 cancellations. That compared with 367 net orders last year.
In the business jet segment, there was a net loss of 85 orders as it suffered 186 cancellations and 101 new orders. That compared to 251 net orders in 2008.
Amid the net order loss was a sign that orders are slowly rebounding and cancellations slowing. In the fourth quarter, Bombardier had seven net orders, up from two the previous quarter.
The improvement is consistent with what other aircraft manufacturers have reported.
Net orders for commercial planes decreased to 88 from 114 as Bombardier registered buys for 22 CRJ regional jets, 16 Q400 turbos and 50 CSeries that are slated to enter service in 2013.
Although the deliveries and orders were down, they were better than analysts had expected.
Bombardier's shares closed at $5.45, up 16 cents Friday on the Toronto Stock Exchange.
"With the business jet market and the broader aerospace industry now entering a slow recovery period, we are becoming more positive on Bombardier," Cameron Doerksen of Versant Partners wrote in a report.
Based on the deliveries, he boosted his fiscal 2010 earnings forecast by two cents to 41 cents per share.
Doerksen said likelihood of new engines on Boeing 737s and the Airbus A320 could affect orders for the CSeries but won't be "life-threatening challengers." The 110- to 145-seat plane is slated to enter into service late in 2013, two years before its rivals.
Benoit Poirier of Desjardins Securities said the better-than-expected deliveries and business jet forecast "more than offsets the slightly disappointing commercial aircraft delivery guidance."
The 15 per cent drop in business jet deliveries implies that 150 aircraft will be shipped, ahead of his forecast of 140 planes. The 20 per cent decrease in commercial planes suggests 97 planes will be delivered, below his forecast of 102.
Most of the commercial deliveries are expected to take place in the last three quarters of fiscal 2011 because of prior production rate reductions and a delay in the certification of the CRJ1000.
Analysts expect the performance of Bombardier Transportation could "more than easily offset" the weakness in the aerospace division.
On Friday, it announced a $34-million three-year contract with Montreal's suburban train agency to provide locomotive and passenger rail car maintenance services for part of its commuter rail fleet.
The Berlin-based rail division is also believed to be a strong contender to develop the U.S. high-speed rail network resulting from US$8 billion of government grants.
It has existing operations in the United States, have supplied rail services including Amtrak's Acela train in the Northeast corridor. Bombardier also has proven high-speed rail manufacturing operations in Europe and China.