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BOMBARDIER REPORTS 65% PLUNGE

27 Aug 02. Bombardier Inc. posted a 65% plunge in fiscal second-quarter net income due to one-time charges and a big drop in the business-aircraft market.

On Tuesday for the quarter ended July 31, the company reported net income of C$101.4m(US$65.2m), or seven Canadian cents a share, (2001: C$ 287.9m, or 20 Canadian cents a share.

Revenue jumped 16% to C$5.71bn, (2001: C$4.91bn), as aerospace
revenue fell 1.2% to C$2.68bn and transportation revenue surged 49% to C$2.4bn.

The latest results included after-tax charges of C$136m or 10 Canadian cents a share. Much of the charge is from the write-down of used aircraft and the anticipated reduction in sublease revenue from “used commercial aircraft under sale and leaseback,” the company said.

In a prepared statement, President and Chief Executive Robert E. Brown said the second quarter was hurt by lower business-aircraft deliveries, “which is affected by the persistent weakness of the U.S. economy.” He noted that in the first half of August, customers canceled orders for eight airplanes.

The company last Friday cut its fiscal-year earnings outlook to 70 Canadian cents a share from 89 Canadian cents. Year-earlier earnings excluding items were 81 Canadian cents a share.

“The economic environment in which we are operating presents significant challenges, particularly in North America, and no corporation — especially not one of our size — is completely sheltered from the kind of turmoil we are experiencing today,” Mr. Brown said in Tuesday’s statement.

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