Thursday, August 09, 2012

Bombardier: Rail markets remain resilient

Written by  Luther S. Miller, Senior Consulting Editor

Bombardier Inc. reported Thursday that its Transportation unit had a strong second quarter, though earnings were off slightly due to the timing of large deliveries.

"The rail industry markets remain resilient in spite of the challenges of the global economy," said the company. "Many tender activities are on the horizon, such as metros in India, commuter trains in the U.K., locomotives in Germany and high speed coaches in the U.S."

During the second quarter of 2012, Bombardier Transportation reported $2.9 billion of new orders.

"The group confirmed its leadership in North America with the signature of a contract for 410 rail cars with the San Francisco Bay Area Rapid Transit District (BART), valued at $897 million, as well as for 300 subway cars with the Metropolitan Transportation Authority (MTA) to be delivered to New York City Transit, valued at $599 million" said Bombardier.

"The framework agreements and options represent a good potential for new orders as illustrated by the order for an additional 39 FLEXITY Berlin trams from a framework agreement for a maximum of 206 vehicles. Bombardier Transportation also received an order for 210 double-deck commuter train cars for the RER, the Greater Paris commuter network, of which Bombardier's share is valued at $417 million."

Bombardier Transportation's revenue totaled $1.9 billion for the quarter ended June 30, compared to $2.7 billion for the same period last fiscal year. EBIT was $118 million, compared with $191 million last fiscal year, translating into an EBIT margin of 6.2% versus 7.2% last fiscal year. Free cash flow usage amounted to $78 million for the second quarter ended June 30, 2012, compared with a usage of $473 million for the same period last fiscal year. The order backlog totaled $31.7 billion as at June 30, 2012, compared with $31.9 billion as at December 31, 2011 due to the weakening of most foreign currencies versus the U.S. dollar.