Bombardier (TSX:BBD.B) Expects Q1 Revenue To Rise 18%: Should You Buy?

Canadian firm Bombardier Inc (TSX:BBD.B) has said that it expects robust revenues and earnings for the first quarter of fiscal 2021. The Montreal-based business aircraft maker announced on Monday, May 3, its interim results that project revenues to soar 18 per cent on a year-over-year (YoY) basis against US$ 1.3 billion a year ago.

Bombardier stock improved by 3.3 per cent and posted a one-day volume of 7.7 million shares on Monday following the preliminary earnings announcement. On Tuesday, however, the stock was down about two per cent (11AM EST).

Bombardier also estimated an adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of US$ 123 million and free cash flow usage from operations of US$ 405 million.

As per Refinitiv estimates, the firm was projected to generate revenues of US$1.18 billion and adjusted EBITDA of US$89 million in the previous quarter, representing an adjusted operating loss of US$ 189.4 million.

Its full-fledged financial numbers will be out on Thursday, May 6.

Meanwhile, the aerospace and defense firm faced criticism from its debt holders for allegedly violating debt agreements by selling its commercial aircraft and railways operations.

Let us delve into Bombardier’s stock performance.

Bombardier Inc (TSX:BBD.B)

Bombardier’s share price surged by 98 per cent this year and grew by 96 per cent in the past one year. However, it saw a dip of about two cent in the last month amid extended lockdowns.

The stock has outperformed the S&P/TSX Aerospace & Defense Industry Index this year, propelled by the company’s gradual recovery and signs of financial improvement.

At the previous close price of C$ 0.95 apiece, the stock maintained its bull run from short-term to the long-term range, as per data available on Refinitiv.

©Kalkine Group 2021

Bombardier delivered as much as 44 airplanes and recorded revenues of US$ 5.6 billion in the fourth-quarter earnings of 2020, which was a rise of three per cent YoY.

In its 2021 forecast, the company expects robust aircraft revenues vis-à-vis 2020, led by the steady recovery from the pandemic-led slump. It anticipates aircraft deliveries between 110 and 120 for the year.

The Quebec-based aircraft firm has sought the approval from its holders of other debt securities to explain to critical holders that the asset sales are authorized. The company stated through its news release that it is trying to maintain organizational value and protect its stakeholders’ interests.

The above constitutes a preliminary view and any interest in stocks should be evaluated further from investment point of view.