Bombardier Results Investor Analysis, Aircraft Deliveries Orders, Flexity Trains cs100 Jets

            Bombardier Inc (TSE:BBD.B) is a rare company in that it holds the disctinction of being both the world's largest train maker and the world's #3 manufacturer of aircraft.  The Germany-based train division dubbed Bombardier Transportation remains slightly more important to the company financially, however the gap is closing fast;  For the nine month period ended October 2011, sales of trains and related services accounted for 53% of company revenue and 59% of ebit - however during the nine month period ended September 2012 that fell to 49.8% and 54%, respectively.  Bombardier puts the blame squarely on European demand (lower activity/contracts reaching completion not being filled by as many new ones) which it says accounts for 88% of the decline in rail car sales (9-month period). 

I'm still optimistic about the Transportation division !  In China and Russia, demand for trains developed by Bombardier will inevitably go up due to key license agreements signed with major rail equipment companies in China (CSR Puzhen) and Russia (manufacturer Uralvagonzavod).  As well, business from North America is on the upswing which bodes well for Bombardier - 3Q revenue from North American customers was $373m (+17.7%) and $1,095m (+7.0%) in the nine month period.  Also, revenue from Asia-Pacific which was down considerably during the first two quarters, recovered strongly in the third when it increased by +31.3% qoq (still down -42.9% in 9M2012 but that's due to uncharacteristically low sales in the first two quarters).  Total company backlog as of September 2012 is $58.6 billion up +8.7% or $4.7 billion in just the last nine months:  44.5% aerospace, 55.5% trains.

Aircraft revenue is stable, which is a great sign considering more than $200 million worth of aircraft deliveries was postponed until the fourth quarter.  The postponement of the CS100 first flight by half a year (Jan 2013 to June 2013) is discouraging but nothing to be too concerned about;  The two larger aircraft manufacturerers, Boeing (787 Dreamliner) and Airbus (Airbus A380) ended up releasing their latest larger models three years behind schedule --> Bombardier's 100-149 passenger CSeries planes will compete directly with the Airbus A320 and Boeing 737.

The company remains a force in the manufacturing industry.  Its customer base remains diverse (Saudi Arabia was the biggest rail customer this quarter), it keeps innovating (Learjet 70 and 75 programs launched in May 2012, continuance of Learjet 40 and 45) and getting its jets certified in key geographic regions which gives it a competitive advantage (in June 2012 awarded aircraft type certification for the Q400 aircraft for operation in Russia).  There's also the well known fact that Bombardier's new planes are lighter and 20% more efficient on fuel.

Net profit remains stable and orders keep coming in !