Bombardier Hits $2.1 Billion Revenue in Q3 2024, Cash Flow In Free Fall
Bombardier Inc. (TSX: BBD.B) reported a 12% increase in third-quarter 2024 revenue, reaching $2.1 billion, up from $1.86 billion in the same period last year. This growth was propelled by a significant 28% year-over-year boost in aftermarket services revenue, which hit a record $528 million, signaling the company’s strategic emphasis on expanding its service network.
However, despite these gains, Bombardier’s free cash flow shifted sharply from a positive $80 million in Q3 2023 to a usage of $127 million this quarter, due in part to a $149 million inventory investment, a move that reflects both growth ambitions and potential cash flow constraints.
Net income for Q3 2024 reached $117 million, a substantial improvement over last year’s $37 million loss in the same quarter. Diluted EPS similarly rebounded, reaching $1.09 per share compared to a loss of $0.47 in Q3 2023, suggesting some notable improvements in net profitability.
The quarter’s adjusted EBITDA was $307 million, up 8% from last year’s $285 million, but representing only a marginal improvement given the scale of revenue growth. Adjusted EBITDA margin declined slightly, slipping from 15.4% in Q3 2023 to 14.8%.
In terms of cash flow, Bombardier’s financials show a steep drop, with cash flow from operating activities falling to negative $81 million from a positive $179 million in Q3 2023. This substantial swing underscores a shortfall in cash generation, partly due to increased inventory levels in preparation for planned aircraft deliveries and expanding service operations.
The company’s capital expenditures on property, plant, and equipment (PP&E) and intangible assets totaled $46 million this quarter, marking a decrease from $99 million in Q3 2023, a reduction that reflects some degree of cost-saving.
Bombardier ended the quarter with available liquidity of $1.2 billion, a notable reduction from $1.85 billion at the end of 2023. Cash and cash equivalents totaled $872 million, down 45% from $1.59 billion at the close of last year, underscoring that while the company is still well-capitalized, its cash cushion is shrinking. To bolster liquidity, Bombardier recently increased its revolving credit facility by $150 million to $450 million.
“The strong revenue growth this quarter reflects the strength of our long-term plan and our ability to consistently deliver on commitments,” said Éric Martel, Bombardier’s President and CEO. “Our high book-to-bill ratio reinforces our backlog, ensuring predictability in a growing market for business jets.”
Bombardier delivered 30 aircraft in Q3, aligning with its full-year guidance on deliveries. As of September 30, 2024, the company’s backlog stood at $14.7 billion, up 4% from $14.2 billion at year-end 2023, supported by a 1.0 book-to-bill ratio.
Bombardier last traded at $18.10 on the TSX.
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