Oct 28 (Reuters) - Bombardier Inc and rival
Textron Inc on Thursday reported growing backlogs for
corporate aircraft as demand for private flights soars, but
company executives warned of supply chain headwinds.
Executives from both companies told analysts they see
corporate aircraft activity picking up in Europe, adding to a
U.S. surge in demand that has filled seats for private operators
and boosted plane pricing after orders slipped last year due to
Cessna business jet maker Textron raised its full-year
earnings per share and cash guidance, after General Dynamics
Corp's Gulfstream Aerospace said on Wednesday its
business jet backlog reached a six-year high.
Corporate planemakers, eager to take advantage of strong
demand, are taking steps to mitigate the impact of global supply
chain disruptions, including supply and pricing of raw
materials, logistics and labor shortages among smaller
While Bombardier has not faced any assembly line
interruptions, the business jet maker is taking steps to deploy
more staff to suppliers sites "to maintain clear visibility,
Chief Executive Eric Martel said.
Montreal-based Bombardier earlier posted a smaller third
quarter-loss largely in line with analysts' estimates and
generated $100 million in free cash from operations, a metric
closely watched by investors, reversing negative usage from last
Bombardier's backlog increased by about $500 million to
$11.2 billion, while Textron Aviation reported a backlog of $3.5
billion at quarter-end, up $1.9 billion year to date.
Textron said the company is ramping up business aircraft
manufacturing toward a goal of hitting 2019 production levels.
Bombardier has not announced any changes to rates as it balances
supply chain capacity, demand and pricing.
U.S.-based Textron reported adjusted earnings per share of
85 cents, beating analysts' estimates of 78 cents a share,
according to data from Refinitiv, but missed on revenue.
Textron shares were up 3% at $72.88, while Bombardier stock
rose 2.37% in morning trade.
Bombardier recently unveiled an upscale variant of its
Challenger 350 business jet as it vies to protect its dominant
midsized market share.
Martel said recent announcements of two new large-cabin
models from Gulfstream would spare the Challenger.
"I think our competitor now just positioned themselves right
at the top of that segment leaving a lot of room in the midsized
segment for us," he said.
Bombardier posted an adjusted net loss of 4 cents per share
in the quarter, compared with a loss of 9 cents per share a year
earlier. Analysts were expecting a loss of 5 cents per share,
according to Refinitiv.
(Reporting by Sanjana Shivdas in Bengaluru and Allison Lampert;
Editing by Jan Harvey and David Holmes)