Bombardier reports higher Q2 profit despite higher supply chain costs from tariffs

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A plane is seen at a Bombardier facility during a federal election campaign stop, in Dorval, Que., Thursday, April 24, 2025. THE CANADIAN PRESS/Christopher Katsarov
MONTREAL — Bombardier Inc. reported a jump in net income in its second quarter even as it dealt with higher supply chain costs stemming from tariffs.
'Looking at other margin drivers for Q2, our pricing was stronger year-over-year but was offset by continued supply chain disruption costs, including some tariff-related costs, which are all fully reflected in our guidance,' Bart Demosky, Bombardier's chief financial officer, said on an earnings conference call on Thursday.
The aircraft maker, which keeps its books in U.S. dollars, said it had a net income of US$178 million in the second quarter, up from US$19 million in the same quarter last year.
The company said free cash flow usage rose to US$164 million during the quarter, significantly higher than US$68 million during the same period a year earlier. The company said the increase was partly driven by investments in inventory to 'support higher deliveries' in the back half of the year.
The company reported a jump in its backlog to US$16.1 billion at the end of the quarter, up US$1.9 billion from the end of the previous quarter, as Bombardier saw its highest single-quarter business jet unit order volume in over a decade.
On June 30, Bombardier announced a firm order for 50 of its Challenger and Global aircraft, combined with a services agreement. The value of the deal was US$1.7 billion and deliveries are set to begin in 2027, the company said.
The buyer, which was not named, was a first-time Bombardier customer, and also had 70 new aircraft purchase options. Should the options be exercised, the value of the deal would balloon to more than US$4 billion, Bombardier said in a release at the time.
RBC analyst James McGarragle said in a July 1 note that the deal was 'a clear positive' for the company, underscoring the 'robust demand for its aircraft and maintenance services.'
Bombardier's book-to-bill — the ratio of orders received to deliveries billed, a key indicator of near-term demand for a company's products — increased as a result of the deal.
'This order does contribute in a significant way to our large backlog jump. Overall, it's really half the story behind our solid unit book-to-bill ratio of 2.3. We are seeing sustained demand and consistent flight utilization for business jets,' chief executive Eric Martel said on the call.
Martel also noted efforts by the aircraft maker to improve its balance sheet.
'I want to highlight that the major effort to clean up our balance sheet continues to progress very well. This past quarter, we successfully refinanced US$500 million of senior notes. This, of course, is in line with our strategy to strengthen our balance sheet and have a very comfortable debt maturity runway,' he said.
The company says its adjusted net income for the quarter ending June 30 was US$117 million, up from US$111 million last year.
Adjusted earnings per share came in at US$1.11 each, compared with US$1.04 per share last year.
Revenue totalled US$2.03 billion in the quarter, down from US$2.2 billion in the same period last year.
Bombardier said its services businesses reported 16 per cent year-over-year growth, reaching US$590 million during the quarter.
This report by The Canadian Press was first published July 31, 2025.
This is a corrected version. A previous version did not reflect that Bombardier reports in U.S. dollars.