Bombardier Inc’s Class B Subordinate Shares (TSX: BBD.B) has been the largest marker mover by volume on the TSX today following the company revising guidance downward for the third time this fiscal year. Investors have reacted hard to the revised guidance, with shares of the equity currently trading down 30% on the TSX, at $1.25 per subordinate share at the time of writing.
The guidance revision is the third time the company has done so this year following the initial issuance of guidance on December 6, 2018 for the fiscal year of 2019. The company has continually failed to meet its initial projections, and as such revised guidance after the first and second quarter financial results, and has now revised yet again with the release of preliminary fourth quarter results.
Thanks in part to updated segment reporting beginning in the third quarter, guidance figures are semi-difficult to cross compare on a straight line basis. The company began consolidating its three separate aerospace divisions into a single aviation segment to streamline future guidance.
Here’s the changes the company has identified in terms of guidance throughout the fiscal year.
| Original Guidance | First Quarter | Second Quarter | Fourth Quarter | Overall Change | |
| Consolidated Revenues | ≥$18.0 B | $17 B | $16.5 – $17 B | $15.5 B | (13.8%) |
| Aviation | $9.90 – $10.15 B | $9.65 – $9.90 B | $8 B | $7.5 B | (24.2%) |
| Transportation | $9.5 B | $8.75 B | $8.75 B | $8.3 B | (12.6%) |
| Consolidated Adjusted EBIT | $1.15 – $1.25 B | $1.00 – $1.15 B | $700 – 800 M | $400 M | (65.2%) |
| Aviation | 7.5% – 9% | 7.5% | 7% | 7% | (6.6%) |
| Transportation | 9% | 8% | 5% | 1% | (88.8%) |
| Consolidated Adjusted EBITDA | $1.65 – $1.80 B | $1.50 – $1.65 B | $1.2 – $1.3B | $830 M | (49.6%) |
| Free Cash Flow | Breakeven (+/- $250 M) | Breakeven (+/- $250 M) | ($500 M) | ($1.2 B) | N/A |
| Aircraft Deliveries | 185 – 190 | 180 – 185 | 175 – 180 | 175 | (5.4%) |
| Business Aircraft | 150 – 155 | 150 – 155 | N/A | 142 | (5.3%) |
| Commercial Aircraft | 35 | 30 | N/A | 33 | (5.7%) |
Investors have not responded kindly to the continued failure to meet objectives by Bombardier’s management team. The company is off significantly from its 52 week high of $3.03, with the equity trading as low as $1.10 this morning, a decline of over 63.6% in the last year.
The company is expected to release full fourth quarter and fiscal year 2019 financial results on February 13, 2020.
Bombardier Inc’s Class B Subordinate Voting Shares are currently trading at $1.245 on the TSX, down 30.4% on volume of over 42 million.
Information for this briefing was found via Sedar and Bombardier Inc. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
