Bombardier (BBD) says it plans to increase production over the next two years as global demand for private airplanes heats up.
Swinging to a surprise profit in its latest quarter, the Montreal-based company aims to exceed last year's 120 aircraft deliveries, raising them by 15% to 20% as soon as 2023.
Bombardier's latest guidance forecasts an 8% increase in business jet revenues to $6.5 billion U.S. this year, up from $1.5 billion U.S. in 2021.
While the commercial aviation market struggled amid the COVID-19 pandemic, use of private and business jets rose by 42% in the U.S. and 33% in Europe in 2021, according to the U.S. Federal Aviation Administration (FAA).
Flight cancellations, concerns about exposure to COVID-19, and surging wealth among the ultra-rich have helped drive demand for private aircraft.
Bombardier has streamlined operations in recent years to become a pure-play manufacturer of business jets following the sale of its rail and commercial aircraft divisions.
The company aims to grow capacity by expanding service centres in Singapore and England, and building new facilities in Miami and Melbourne this year following construction of service and maintenance stations in Germany, the U.S. and Dubai in 2021.
In line with expectations, deliveries dipped to 38 in the fourth quarter from 44 a year earlier due to a more even distribution of Global 7500 completions throughout the year, Bombardier said.
Full-year business jet revenue rose 7% to $6 billion U.S. The heightened activity helped grow Bombardier's service revenues by 44% last quarter versus a year earlier, with nearly 5,000 of the company's business jets now flying.
The company, which keeps its books in U.S. dollars, said it expects adjusted earnings to shoot up 29% to $825 million U.S. this year. It reported net income of $238 million U.S. or $0.09 per diluted share for the quarter compared with a net loss of $337 million U.S. or $0.18 U.S. per diluted share in the last three months of 2020.
The profit beat analyst expectations of a $57 million loss, according to financial data firm Refinitiv. Revenue for the fourth quarter totalled $1.77 billion U.S., down 25% from $2.34 billion U.S. in the fourth quarter of 2020.
Bombardier stock is currently trading at $1.76 per share on the Toronto Stock Exchange, essentially flat so far this year, but up 5% over the last six months.
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