Bombardier Q4 Loss Narrows; To Cut 7000 Jobs Over Next Two Years

Bombardier and Air Canada announced today that the parties have signed a Letter of Intent or LOI for the sale and purchase of 45 CS300 aircraft with options for an additional 30 CS300 aircraft, including conversion rights to the CS100 aircraft.

The company, which reports in USA currency, had a net loss of US$5.34 billion for 2015, including a US$677 million loss in the fourth quarter.

Bombardier says it will cut its workforce by 7,000 positions over the next two years, including 2,000 contractor positions. “They are important to ensure that, with our 64,000 employees worldwide, we continue to create superior value for our customers, be more competitive, and deliver improved financial performance”.

For the company’s aerospace operations in Belfast, around 580 cuts will be made this year, of which 200 permanent jobs are likely to require redundancies, plus a further potential reduction of roughly 500 next year.

Confirmation of the restructuring helped Bombardier’s stock move higher away from last Tuesday’s 25-year lows.

Bombardier’s quarterly results missed analysts’ expectations, and it also forecast lower-than-expected revenue for 2016.

Among other things, Bombardier reported its revenue in the fourth quarter ended December 31 was $5 billion, down from just under $6 billion a year earlier.

The ratio for the reverse stock split will be decided later, but is targeted to result in an initial post-consolidation share price of C$10-C$20 per class A share or class B subordinate voting share, the company said.

For 2016, Bombardier said it expects revenue of between $16.5 billion and $17.5 billion, which falls shy of the $18.1 billion analysts expect.

Bombardier shares closed Tuesday at 90 cents, within a 52-week trading range of 72 cents to $2.79.