Bombardier tops profit estimates on higher private jet usage, repair demand

By Allison Lampert and Aatreyee Dasgupta

MONTREAL, April ‌30 (Reuters) - Bombardier on Thursday ​beat Wall ​Street estimates for first-quarter profit, lifted by strong demand for repair and maintenance services and increased private flying despite higher jet fuel prices.

Shares of the Canadian business jet maker rose 21% on the day with the ‌upbeat earnings report.

Revenue from services jumped 25% year-on-year to $617 million, driven by demand for parts and maintenance ⁠as Bombardier's global jet fleet expands, particularly in the United States.

"Despite everything going on right now, the war with Iran and Ukraine, we still see growth ‌in flight hours," CEO Eric Martel told ‌analysts.

Private aviation, used primarily by affluent consumers, has remained resilient even as higher jet fuel prices tied to the conflict in the Middle East have forced commercial airlines to trim flights.

Usage by operators of Bombardier's large-cabin Global jets rose 8% ​in the first quarter from a year earlier, Martel said.

Private jetmakers including Bombardier and rival General Dynamics' Gulfstream Aerospace continue to see strong global demand led by the U.S., although order activity has slowed in the Middle East.

Planemakers are still dealing ⁠with supply-chain disruptions that have constrained output. Bombardier faced a non-engine supply-chain snag in the first quarter that delayed the delivery of a handful of aircraft, Martel said, ​adding the issue has since been resolved.

Bombardier generated $360 million in free cash flow during the quarter, its strongest first-quarter performance in nearly two decades, compared with $304 million used a year earlier.

The company ​raised its full-year 2026 free cash flow forecast to more than $1 billion, ‌from a prior range of $600 million to $1 billion, and expects the second quarter to be free-cash-flow positive.

Bombardier delivered 24 aircraft in the quarter, one more than a year earlier, and reiterated plans to ⁠deliver more than 157 jets in 2026.

It also benefited from fresh orders for its recently certified Global 8000 ultra-long-range business jet.

EYES EXPANSION IN DEFENSE

The company has been seeking to expand its defense business through higher capital deployment and backlog-building.

Martel said defense sales momentum has increased and should improve ⁠through the year.

When asked about reports that NATO may replace its aging Boeing AWACS aircraft with jets developed by Bombardier and Swedish partner Saab, Martel ​said a decision was pending. In 2023, NATO said it had selected Boeing's new E-7 AWACS plane as the replacement, but after the Pentagon slashed its own plans to buy the aircraft last year, NATO reopened its search for a replacement.

"We will wait for the formal decision from ‌NATO," Martel told reporters later on Thursday.

"If it ever does materialize in the next few weeks, it would be an excellent news for Bombardier. We're talking about 10 to 12 (Global) 6500 planes."

A ‌Boeing spokesperson said the company "remains fully committed to supporting the airborne early warning and control needs of the United States and its allies ⁠around the world."

On an adjusted basis, Bombardier earned $1.81 per ‌share, beating analysts' average estimate of 77 ​cents, according to LSEG-compiled data.

Revenue rose 5% to $1.6 billion, compared with estimates of $1.64 billion.

(Reporting by Allison Lampert in Montreal, Aatreyee Dasgupta in Bengaluru and Dan Catchpole in Seattle; Editing by Leroy Leo, Nick Zieminski ‌and Tom Hogue)

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