Bombardier is ready to go on delivery of a CRJ900 set for delivery to Delta Air Lines, and another plane, a Q400 turboprop, to an undisclosed customer. But the shutdown of the U.S. government has temporarily grounded the deal. Bombardier (TSX:BBD.B) is used to facing headwinds, but this is something else.
The Montreal-based aerospace giant is ready to go on delivery of a CRJ900 set for delivery to Delta Air Lines, and another plane, a Q400 turboprop, to an undisclosed customer.
But as Canadian Press today reported, banks can’t close on a financing before the aircraft has a registration number. That registration number is the responsibility of the FAA Registry Office, which has been closed by the shutdown of the U.S. government, now in its tenth day.
Bombardier shareholders are accustomed to delays, but many have been of the company’s own making. Last month, after a decade and more than $3.5-billion spent, the maiden voyage of its much anticipated narrow body, medium range CSeries jet left the runway at Montreal’s Mirabel airport -more than a year after it was originally scheduled to.
Despite these recent setbacks, investors have been focusing on a steady stream of recent good news, sending the company’s stock near 52-week highs.
This past summer, Bombardier announced it had signed a deal with Rostekhnologii, a state corporation controlled by the Russian Federation, for fifty of its Q400 NextGen aircraft. Management says the order will also provide them with the opportunity to place an additional fifty. If the total value of the contract is realized, it would be worth about $3.39-billion.
On August 1st, Bombardier reported its Q2, 2013 financials. The company earned (U.S.) $180-million on revenue of $4.4-billion, up from $4.1-billion in the same period a year prior. The company said its backlog of $65.5-billion as at June 30th was a record.
Shares of Bombardier on the TSX closed today up 1.4% to $4.92.