Bombardier Latest Setback Erases Stock Gain From Delta Lifeline

The boost from Bombardier Inc.’s biggest aircraft order has vanished.

The stock has posted its worst month since January as the company’s marquee jetliner suffered another setback and concern deepened about business-aircraft demand. Bombardier’s shares fell below the level of April 27, the last trading day before the planemaker announced a $5.6 billion order for its C Series jets from Delta Air Lines Inc.

Delays in engine shipments from Pratt & Whitney prompted Bombardier to lower its C Series delivery forecast to seven planes this year from 15. That fueled questions about the planemaker’s cash flow and ability to ramp up production on the aircraft, which was two-and-a-half years late and more than $2 billion over budget when it made its commercial debut in July.

 “People thought they were off to the races,” said Gimme Credit analyst Evan Mann. “Now all of a sudden, it makes you pause and think.” Bombardier tumbled 16 percent in September, the biggest decline on the S&P/TSX Composite Index. The shares have slumped another 3.9 percent this month to C$1.73, reducing the market value of the Montreal-based company to C$3.96 billion ($3 billion). The stock has gained 29 percent this year.

Bonds also have taken a hit of late. Bombardier’s 6.13 percent note due in 2021 traded at 99.72 European cents Wednesday, down from 104.83 cents at the end of August. That’s still up from a low of 76 cents in February.

About the Author

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Bob Sanders
Bob is with Wings Journal from the very beginning. Besides writing news here, he likes to do plane spotting during the weekends and tries to get better at photography.

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