IN SPITE of booming demand for jetliners across the world, North American planemakers have had a miserable few months. So far this year Boeing, America’s biggest aerospace group, has suffered the two biggest daily falls in its share price yet seen, caused by downgrades to its production forecasts and news that regulators were investigating its accounting methods.
But its woes look as nothing compared with those of Bombardier, a Canadian maker of planes and trains. On February 17th it announced net losses of $5.3 billion in 2015, mainly due to write-downs, and a $10 billion shrinking of its order book since 2014. Many are asking if the company will run out of cash.
The trainmaking division is doing fine. But Bombardier’s aerospace division, which made only $138m in profit in 2015 before $5.4 billion of write-downs, is giving its executives nightmares. Those parts that used to generate good profits are stalling. The market for business jets, particularly large ones, is suffering from slower growth in emerging economies, says Stephen Trent of Citigroup, a bank. Bombardier has also been losing ground against more...Continue reading
Source: Business and finance http://ift.tt/219FhZ4
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