Shares of Bombardier (TSX:BBD.B) stalled Thursday as rising profits weren’t enough to outweigh the headwinds of supply chain issues.
The airplane manufacturer posted revenue of US$1.45 billion, up 17% year-over-year from $1.25 billion, while net income swung to a profit of $302 million from a loss of $287 million last year.
Bombardier attributed the growth to an uptick in deliveries of its more expensive medium- and large-cabin corporate jets, along with demand for aftermarket services.
The company also increased its financial targets for 2025 last month, setting revenue expectations of more than $9 billion.
However, the stock is down more than 7% Thursday afternoon to $59.24 in New York.
The bad news for Bombardier was its negative $247 million in free cash usage, a metric investors were watching closely for. The company has taken higher working capital costs in order to fulfill its plan to deliver more than 138 planes this year, compared to 121 a year ago.
Then there are supply chain challenges, which have impacted the company for three consecutive years, CEO Éric Martel acknowledged.
"It's been challenging," Martel said on an earnings call.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
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