Bombardier Inc (OTCMKTS:BDRBF) might have resumed the major downtrend yesterday as it finished the last trading session with a major loss of 15.53%. The volume of 877,000 was much higher than the daily average of 215,000, adding to the woes of the bulls. A bout of intense selloff is a very frequent occurrence in a major bear market like the one the stock is suffering from and even a major capitulation can’t be ruled out. At the present moment, the thin hope of the bulls lies on the lower boundary of the short term channel.
Bombardier Inc (OTCMKTS:BDRBF) announced its financial results for 3Q ended September 30, 2015. The revenue came at $4.1 billion in 3Q2015 against $4.9 billion for the comparable quarter last fiscal year. EBIT in 3Q2015 amounted to a loss of $4.6 billion against the profit of $171 million for the third quarter in 2014.
Net loss amounted to $4.9 billion due to special items primarily related to impairment costs on ‘C Series’ and ‘Learjet 85’ plan tooling, against the net income of $74 million for the same quarter, a year ago. On an adjusted basis, net income was $2 million, for 3Q2015 compared to $222 million for the same quarter the previous year. For the quarter ended September 30 free cash flow usage amounted to $816 million against a usage of $368 million for 3Q2014.
As of September 30, 2015, the short-term capital resources amounted to $3.7 billion including cash/cash equivalents of $2.3 billion, versus $3.8 billion and $2.5 billion, respectively recorded at end of December 31, 2014. Bombardier reported that the overall backlog touched $61.8 billion in 3Q2015 versus $69.1 billion as of December 31, 2014.
The management view
Alain Bellemare, the CEO and President of Bombardier, said that after a few months, the company strengthened its management team. They performed in-depth assessment of business and now have a clearer picture of future strategic plans. The management is implementing the right measures and they have solidified liquidity position, achieving the confidence to implement long-term strategic plan.
Bombardier reported that Québec government will invest $1 billion in its ‘C Series’ aircraft program. This association comes at a pivotal time, as the C Series is close to getting certification. The industry is favorable and the company possesses the best leadership, best product and the support of the government.