Read the story here. Advertise at Before It's News here.
Profile image
By ProactiveInvestors (Reporter)
Contributor profile | More stories
Story Views
Last hour:
Last 24 hours:

Bombardier replaces CEO and suspends dividend; reports Q4 loss; shares plunge

% of readers think this story is Fact. Add your two cents.

Bombardier (TSE:BBD.B), the struggling Canadian plane and train maker, replaced its leadership, suspended its dividends, and unveiled plans to raise more than $2 billion in equity and debt, while reporting a fourth-quarter loss. Shares dived.

Alain Bellemare, a former United Technologies executive, will become chief executive officer tomorrow, replacing Pierre Beaudoin, who will become executive chairman, the Montreal, Quebec-based company said in its quarterly earnings statement today. Pierre Beaudoin’s father, Laurent Beaudoin, who led the company for more than 30 years, will retire as chairman.

Bellemare becomes only the second outsider to run the family-controlled company since Bombardier began operating in 1942 as a maker of snowmobiles in rural Quebec.

Bombardier said it plans to raise about $600 million in equity and up to $1.5 billion in new long-term debt.

It will suspend dividends on both Class A and common shares until further notice. Bombardier paid out $182 million in dividends in 2014, down from $196 million a year earlier.

Bombardier said it would explore other options to reduce debt, including “certain business activities’ potential participation in industry consolidation.”

Free cash flow “would be more appropriately applied to bolstering the corporation’s financial structure and investing in its core programs and businesses,” Bombardier said in the statement.

The CEO change and capital-raising moves underscored the pressure on Bombardier from the CSeries, a $4.4 billion program that has become a make-or-break project.

“This is a new beginning, both for myself and for Bombardier,” said Bellemare in the statement. “We must improve profitability and realize the true potential of this great organization.”

The announcements follow a profits warning on January 15 that led to a 25 percent fall in the company’s share price.

Bombardier reported today a fourth-quarter loss due to a $1.4 billion charge relating to its decision to suspend development of a new Learjet model, announced last month. Net loss was $1.6 billion, or $0.92 per share, in the October-to-December quarter, compared to a profit of $97 million, or $0.05 per share, in the same period a year earlier.

Bombardier said its profit excluding items was $0.04 per share, down from $0.07 per share a year earlier. The latest results beat analyst expectations for a profit of $0.02 per share.

Revenue rose to $5.96 billion, also beating expectations, up from $5.32 billion.

Free cash flow in the quarter, which is traditionally Bombardier’s strongest period for plane deliveries, fell to $590 million from $771 million a year earlier.

Worries have increased over Bombardier’s ability to meet its timetable to launch its new C Series jet by the end of 2015. The aircraft is meant to compete with aerospace titans Boeing Co. and Airbus in the 100-plus seat category, but it has been marred by delays and technical hurdles.

The C Series has secured only 243 firm orders, well short of the 300 that the company has targeted ahead of the plane’s entry into service, scheduled for this year.

Shares tumbled 14 percent to $2.62 at 9:53 a.m. in Toronto, stretching losses this year to 37 percent.

Story by ProactiveInvestors


Before It’s News® is a community of individuals who report on what’s going on around them, from all around the world.

Anyone can join.
Anyone can contribute.
Anyone can become informed about their world.

"United We Stand" Click Here To Create Your Personal Citizen Journalist Account Today, Be Sure To Invite Your Friends.

Please Help Support BeforeitsNews by trying our Natural Health Products below!

Order by Phone at 888-809-8385 or online at M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at M - F 9am to 5pm EST

Order by Phone at 866-388-7003 or online at M - F 9am to 5pm EST

Humic & Fulvic Trace Minerals Complex - Nature's most important supplement! Vivid Dreams again!

HNEX HydroNano EXtracellular Water - Improve immune system health and reduce inflammation.

Ultimate Clinical Potency Curcumin - Natural pain relief, reduce inflammation and so much more.

MitoCopper - Bioavailable Copper destroys pathogens and gives you more energy. (See Blood Video)

Oxy Powder - Natural Colon Cleanser!  Cleans out toxic buildup with oxygen!

Nascent Iodine - Promotes detoxification, mental focus and thyroid health.

Smart Meter Cover -  Reduces Smart Meter radiation by 96%! (See Video).

Report abuse


    Your Comments
    Question   Razz  Sad   Evil  Exclaim  Smile  Redface  Biggrin  Surprised  Eek   Confused   Cool  LOL   Mad   Twisted  Rolleyes   Wink  Idea  Arrow  Neutral  Cry   Mr. Green

    Load more ...




    Email this story
    Email this story

    If you really want to ban this commenter, please write down the reason:

    If you really want to disable all recommended stories, click on OK button. After that, you will be redirect to your options page.