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Bombardier’s Challenger jet manufacturing facility in Dorval, Que. he company hiked its financial forecast on free cash flow to greater than US$1-billion for the year while reaffirming its guidance on other key metrics.Christinne Muschi/The Canadian Press
Bombardier Inc. BBD-B-T says demand for its private jets remains strong and its strategy to generate more profit from servicing aircraft is paying off as the company reported its highest free cash flow in nearly two decades during its latest quarter.
The Canadian manufacturer of Challenger and Global jets on Thursday reported a 20-per-cent increase in net income for the three months ended March 31, to US$53-million or 45 U.S. cents a share, on revenue of US$1.6-billion. Adjusted earnings before interest, taxes, depreciation and amortization came in at US$246-million, just shy of the US$250-million analysts expected.
Free cash flow, which is the money a company generates after covering operating expenses and capital expenditures, rose US$664-million year-over-year to US$360-million. The company hiked its financial forecast on free cash flow to greater than US$1-billion for the year while reaffirming its guidance on other key metrics.
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Sales for Bombardier’s service and maintenance business climbed 25 per cent over the same quarter a year ago, to US$617-million. The company’s backlog of orders booked but not yet delivered stands at US$20.3-billion.
“Our strong start to 2026 reflects a favorable market environment and an exceptional product portfolio well aligned with current demand, led by our industry-leading Global 8000 aircraft,” chief executive Eric Martel said in a statement accompanying the results.
Mr. Martel has led a stunning recovery for Bombardier that has seen the plane maker claw its way back from near collapse only a decade ago. After a major restructuring that saw it sell its train division, turboprop, and regional jet units, and hand its C Series airliner program to Airbus SA, it now has a market capitalization of US$23-billion.
The company’s strategy now boils down to a single product: Selling and servicing private jets, for both commercial and military applications. It delivered 24 aircraft during its latest quarter and won several new orders, including a major deal with private aviation operator Vista for 40 Challenger 3500 jets.
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Bombardier partners with Swedish defence company Saab on surveillance aircraft. And it’s in negotiations with Saab AB about the possibility of building the Swedish company’s Gripen fighter jets in Canada under licence. Its defence business is small but growing, passing US$1-billion in revenue last year.
Bombardier generated about 63 per cent of its revenue from U.S.-based customers in 2023, while assembling and shipping out its planes largely from factories in Canada. Its products remain tariff-free under the Trump administration’s exemption for goods stamped compliant under the United States-Mexico-Canada Agreement.
Whether that holds remains to be seen. The U.S. Department of Commerce is now wrapping up a Section 232 investigation into imports of commercial aircraft and related parts to determine if they threaten national security.
“Although we cannot rule out future tariff threats for Bombardier, we reiterate our view that putting tariffs on aerospace components would be counterproductive to the U.S. given its large trade surplus in the sector,” National Bank analyst Cameron Doerksen said in a recent note. American companies also rely on global supply chains that cannot be shifted in a short period of time, he said.
