By Dan Catchpole and Aatreyee Dasgupta
(Reuters) -Business jet maker Bombardier reported a slight drop in second-quarter revenue on Thursday, though its net income beat analyst expectations thanks to a rise in aircraft deliveries and orders, better pricing, and strong demand for parts and repairs.
Those results were somewhat sapped by supply chain disruptions and secondary costs due to higher tariffs on raw materials, particularly aluminum.
The Canadian company burned through $164 million of free cash during the quarter, far above the roughly $41 million that analysts had expected.
The cash burn, a figure closely watched by investors, was largely due to increasing inventory as a buffer against potentially higher tariffs when Bombardier increases production in the second half of the year.
The company’s share price was down 5% in early trading.
Bombardier capped the second quarter with a $1.7 billion order from an unidentified customer for 50 of its Challenger and Global aircraft, plus a service pact and options for 70 more, taking the value of its backlog to $16.6 billion.
Deliveries of those planes will start in 2027.
The company brought in 2.3 times as many orders as planes delivered, far above what many analysts expected.
It delivered 36 business jets in the quarter, down from 39 in the year-earlier period.
The first Global 8000 business jet, described on the company’s website as the fastest civilian jet since the Concorde, will be delivered in the second half of 2025, Bombardier CEO Eric Martel told analysts on a conference call.
The company still expects at least 150 deliveries through the end of this year, a rate it should be able to reach through 2030, he said.
Bombardier Chief Financial Officer Brett Demosky said during the call that profits will be stronger in the rest of the year due to higher deliveries of the company’s more profitable Global models and defense products.
Martel highlighted growing demand for the company’s defense business, adding that Bombardier signed a “strategic pact” with French group Safran to explore “common defense goals and technologies.”
While Bombardier is still open to buying its share of Spirit AeroSystems’ operations in Belfast, Northern Ireland, which make fuselage sections for the Montreal-based company’s business jets, it is fine with Boeing operating the site after it acquires Spirit AeroSystems, he said.
TARIFF CONCERNS
Bombardier continues to contend with the uncertainty of U.S.
President Donald Trump’s aggressive use of tariffs. In early July, Trump called for 35% tariffs on imports from Canada. They are set to begin on Friday.
Much of Bombardier’s supply chain and its aircraft are exempt from tariffs under the United States-Mexico-Canada Agreement, but Trump has not made a final decision on the tariffs.
Removing that exemption would hurt the U.S. aerospace industry more than in other countries, Martel said, adding that the U.S. remains the company’s largest market.
Canada’s luxury tax has cut Bombardier’s sales in the country from about 10 airplanes a year to two or three, Martel said during a later call with reporters.
Supply chain delays “have reduced drastically in the last couple of months,” but delays with one of Bombardier’s three engine suppliers – Honeywell, GE and Rolls-Royce – are the “remaining challenge,” he told reporters.
He did not identify the engine maker.
Bombardier posted quarterly revenue of $2 billion, down from $2.2 billion a year ago.
On an adjusted basis, it earned $1.11 a share versus $1.04 a year earlier, beating analysts’ average projection of $1.06.
(Reporting by Dan Catchpole and Aatreyee Dasgupta; Editing by Clarence Fernandez, David Holmes, Alexandra Hudson and Paul Simao)
