A slowdown in deliveries of Global series business jets is expected to hold down the company’s first-quarter results noticeably, but for the year, Global unit shipments are still expected to outpace those in 2011, J.P. Morgan analyst Joseph Nadol says.
Bombardier is scheduled to detail its first-quarter results during an earnings call scheduled for May 10. In March, Bombardier President and CEO Pierre Beaudoin cautioned that the Global line had slowed in the first quarter since the company was introducing the Global Vision cockpit and has “some ramping up to do with the completion center.” Beaudoin added that business jet output was expected to pick up pace through the year.
Bombardier delivered the first Vision Flight Deck-equipped Global – a Global 5000 – in March to Formula 1 champion Niki Lauda. Before that, however, “we believe there were hardly any Global deliveries through most of Q1, but that they picked up in late March,” Nadol says.
Citing Ascend data, he adds, “the transition to the new ... cockpit appears to have had a more pronounced impact on Q1 volume than we had previously anticipated.” He forecast that the deliveries will be about six, down from the 10 in first quarter 2011. “Fewer Global deliveries should take a sizable bite out our of Q1 Aero profits,” Nadol says.
But Bombardier still forecasts 59 Global line deliveries this year, marking an 11% increase over 2011. “Demand for Globals is solid and production rates are rising, which give us confidence in the growth we are forecasting despite the slow start,” Nadol adds.