Bombardier Inc. missed analysts' revenue estimates in its latest quarter as the plane and train maker touted its new partnership with Airbus SE as a "game-changing" step that will revitalize the company.
The Montreal company's third-quarter revenue of $3.8 billion was less than the $4.1 billion expected by analysts polled by Thomson Reuters. In the same quarter a year ago, the company posted revenue of $3.7 billion.
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Bombardier last month announced it would team with Airbus to accelerate production of its CSeries, dealing a blow to longtime Airbus rival Boeing Co. Airbus agreed to take control of Bombardier's program without investing any money, structuring it so that the European plane maker's involvement will allow CSeries sales to avoid steep U.S. tariffs.
In prepared remarks Thursday, Bombardier Chief Executive Alain Bellemare praised the partnership, which the company said could more than double the size of the CSeries program. Mr. Bellemare said his company remains on track two years into an aggressive five-year turnaround plan to cut costs and boost productivity.
After the quarter ended, Bombardier said it signed a letter of intent to sell up to 61 CSeries aircraft to an European customer. The firm order of 31 aircrafts would be worth about $2.4 billion, the company said, and the full order $4.8 billion. A spokesman for Bombardier wouldn't identify the unnamed European company.
If the sale is completed, it will mark the first time since December that the company has received a firm order for its narrow-body, single aisle CSeries jets.
Bombardier has orders to sell 360 of the new aircraft, but has struggled to land new buyers in the past year because of concerns that its heavy debt and losses would constrain its ability to support the jets.
The jet project is also struggling with negative tariff rulings in the U.S. and technical problems with engines supplied by Pratt & Whitney. Bombardier said Thursday that the engine issues will lower CSeries jet deliveries to between 20 and 22 aircraft in 2017, down from its projection of about 30.
Pratt & Whitney, a division of United Technologies Corp., has agreed to give Bombardier a supplier advance in the fourth quarter to help finance excess inventory.
The company delivered 31 business aircraft during the latest quarter, bringing its total to 96 so far this year, and it expects to reach its goal of 135 by the end of the year. It delivered 16 commercial aircraft during the quarter.
Free cash flow usage was negative in the third quarter, at $495 million, about what analysts expected. Investors and company watchers have been focused on cash flow as a way to gauge the company's ability to execute its turnaround plan.
Over all for the quarter, Bombardier recorded a loss of $117 million, or 5 cents a share, compared with a loss of $94 million, or 4 cents a share, a year ago. Analysts had expected a much smaller $3.15 million loss in the third quarter.
Adjusted to exclude one-off items, Bombardier lost 1 cent a share in its latest quarter, which matched what analysts expected.
The company also said former Caterpillar Inc. executive Douglas Oberhelman has joined its board. He replaces Patrick Pichette, who resigned after four years for personal reasons, Bombardier said.
Write to Cara Lombardo at email@example.com and Jacquie McNish at Jacquie.McNish@wsj.com
(END) Dow Jones Newswires
November 02, 2017 08:11 ET (12:11 GMT)