Bombardier Inc. blew past trade war concerns in the third quarter, with its free cash flow rising 20 per cent year over year to $183 million and its order backlog topping $22 billion.
The Dorval, Que.-based aircraft manufacturer said it delivered 33 aircraft during the quarter, one fewer than in the same period last year, but grew its revenues three per cent year over year to $2.4 billion, driven in part by higher prices and growth in services.
Chief executive Éric Martel said the company is confident about market conditions even as supply chain issues continue to fester throughout the industry.
"We are clearly confident on executing our production ramp-up in this environment, despite the challenge that it's offering," he said on a conference call on Thursday with analysts.
Bombardier in October announced it would invest $270 million in its United States infrastructure, including a new training and learning centre in Kansas and other facilities in Connecticut, Indiana and Texas. Overall, it is expected to add 800 jobs in the U.S.
Following the announcement, U.S. President Donald Trump walked back earlier threats to block Bombardier sales in his country and began celebrating the company. At a rally in Kansas last month, ahead of the midterm elections, he promised to protect the jobs of people who work there.
Martel said its investments there would strengthen the company's presence in the "world's largest business aviation market."
He also said the company is assessing its trade risks as "much lower" now compared to 18 months ago. Even though the U.S. and Canada remain mired in a trade war, Prime Minister Mark Carney recently made positive comments about the state of discussions.
Still, Martel said disruptions are somewhat normal now, though he ranked trade issues and geopolitical tensions as the top risks facing his company.
After moving past the COVID-19 pandemic and the supply chain challenges it posed and through an ongoing trade war with the U.S., he praised his team's ability to overcome disruptions.
Tim James, an analyst at TD Securities Inc., said in a note on Thursday that Bombardier's order book was stronger than forecast, which "suggests no cracks in the business jet cycle and continued resliency to geopolitical events and general uncertainty."
Analysts at Stifel Canada Inc. said the company has shifted from a turnaround story to a company poised for growth, particularly if it can increase its amount of defence-related business, which is currently around 10 per cent of its revenues.
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"It's a bit unfortunate, but it became a new normal in the supply chain to be able to navigate through this environment and perform," he said.
Martel said business remains brisk in North America and Europe, although sales in the Middle East have slowed down amid the ongoing conflicts there.
"It's taking a bit more time than we thought to come back to a more normal environment," he said.
