If you’re Guy Hachey, you need the patience of Job. And a big dose of optimism, it would seem. The bigger, the better.
Mr. Hachey is chief operating officer at Bombardier Aerospace, a division of Bombardier Inc. (BBD.B-TSX), Canada’s biggest manufacturer of transportation equipment.
And in late May, Mr. Hachey had to contend with yet another problem in the long-delayed rollout of Bombardier’s new C series jetliners.
Specifically, one of the new planes suffered a major engine failure during a routine maintenance test at the company’s assembly plant at Mirabel, Que., north of Montreal.
Nonetheless, Mr. Hachey remains confident the planes will go into service as planned in the second half of 2015.
Moreover, Pratt & Whitney, which manufactures the engine, reportedly has a good grasp of the problem.
And if its hunch proves correct, the problem could likely be fixed quickly.
Yet, Mr. Hachey may be overly optimistic. Although he’s reported to have described the damage to the aircraft as manageable, the Canadian Transportation Safety Board has sent a team to Mirabel to investigate.
Moreover, Bombardier has shipped the engine back to Pratt & Whitney in Connecticut for inspection.
Bombardier also says the C series planes will sit out the Farnborough air show in England in mid-July. Still, it hastens to add there are other shows in which the company will participate.
Although four of the C series planes have so far racked up nearly 330 hours of testing, this is 2,070 hours short of what’s needed for certification from Transport Canada.
Still, Bombardier can take heart from Deutsche Lufthansa AG (DLAKY-OTC), Germany’s flag carrier.
The airline, which has ordered 30 of the C series aircraft, has assured Bombardier that it continues to have faith in the program.
Since launching the program in 2008, the aircraft maker has racked up more than 200 firm orders for the new planes.
Meanwhile, Bombardier’s rail equipment division continues to barrel down the track, having inked a deal in March to supply 29 commuter trains to Germany’s Deutsche Bahn.
The deal, valued at US$203 million, marks the 13th call-off from a US$1.4 billion framework agreement signed in 2007.
And earlier this year, Bombardier signed a US$2.7 billion contract with the Australian state of Queensland for rolling stock.
Bombardier’s rail division continues to shine elsewhere, having teamed up in January with China’s Huawei Technologies to demonstrate a new system of wireless rail communications.
The system would appear to be especially useful in today’s security-conscious world, given the system’s ability to detect nuclear explosives, as well as chemical, biological and radiological threats.
Meanwhile, on the other side of the globe, Bombardier’s rail division bagged a $681 million order to supply another 365 cars to Bay Area Rapid Transit, the high-speed commuter system serving San Francisco, as well as other communities in the region.
The order brings to 775 the number of cars Bombardier has so far sold to BART.
But the BART win is hardly the first time the company has scored in the world of high-speed passenger rail.
In Sao Paulo, Brazil, that country’s rapidly growing financial and commercial hub, as well as this year’s host to the World Cup of soccer, Bombardier was chosen to build a monorail priced at US$1.4 billion.
And a few thousand kilometers to the east, the company got the contract to lay down a 3.6-kilometre monorail in Riyadh, the capital city of Saudi Arabia.
Our market mavens this month were unfazed with the latest snafu with the C series aircraft.
Of the 13 analysts we polled, 10 rated Bombardier a buy, one a buy/hold and two a hold, lofting the company into third place in our list of top-10 buys.
For the three months ended Dec. 31, Bombardier’s adjusted net income fell to US$129 million or $0.07 a share, from $181 million, or a dime a share, for the similar period in 2012.
Revenue, however, presented a brighter picture, rising US$700 million, or 15.1 per cent to US$5.3 billion, while earnings before interest and taxes zoomed to US$185 million from $1 million.
For the fiscal year ended Dec. 31, Bombardier’s net income slid to US$608 million or $0.33 a share, from $671 million, or $0.36 a share, for the similar period in 2012.
Investor’s Digest of Canada, MPL Communications Inc.
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