The firm order from Sweden's Braathens Aviation could help stir up interest in the single-aisle aircraft at this month's Paris air show, a key aviation industry sales event, and take some pressure off Bombardier to explain sluggish sales so far.
We believe there is a good chance of additional orders at the show, which would clearly alleviate some of the concerns investors have had about the potential viability of the CSeries program, said National Bank Financial analyst Cameron Doerksen.
Bombardier, the world's third biggest civil aircraft maker, does not try to align its orders with air shows but announces them when they occur, Gary Scott, president of Bombardier's commercial aerospace division told Canada's BNN television.
But he added that the CSeries will start to see a lot more orders because it is less than three years away from being launched, a period when orders tend to escalate.
News of the latest order, which is worth $665 million and includes an option for Braathens to buy another 10 CSeries aircraft, came on the same day Bombardier released healthy results showing a 13 percent rise in first quarter earnings.
The Braathens order brings to 100 the total number of firm orders for the 110-145-seater aircraft, which is set to enter the market in late-2013 and compete with Boeing Co's
Braathens is Bombardier's fourth customer for the CSeries. Its firm order is for five smaller CS100 aircraft and five larger CS300 mainline jetliners. If the Swedish firm turns its option for 10 more aircraft into firm orders the deal value will rise to about $1.37 billion.
RESULTS BETTER THAN EXPECTED
Bombardier earlier released first-quarter earnings that beat market expectations due to increased aircraft deliveries, notably higher-margin Global Express business jets.
I think it was a good quarter. We continue to see supportive trends and orders in business jets and transportation, said BMO Capital Markets analyst Fadi Chamoun.
That should continue to drive revenue and margin improvement in the next two years, he said.
Bombardier, which is also the world's largest train maker, reported net profit of $220 million, or 12 cents a share. That was ahead of analyst expectations of 10 cents a share as the market for business jets revived after a slump in 2009 because of the recession.
A year ago the Montreal-based company reported earnings of $195 million, or 11 cents a share.
Revenue rose 9 percent to $4.66 billion.
The company's overall backlog was $55.1 billion as of April 30, compared with $52.7 billion on January 31.
Bombardier left unchanged its March forecast when it said it would deliver 150 business jets and 90 commercial aircraft in calendar 2011, an estimate based on an 11-month financial year.
Our commercial aircraft segment, although slower to recover, is seeing an improved level of interest from customers, said Chief Executive Pierre Beaudoin.
Revenue at the aerospace division rose 10 percent to $2.2 billion. It received 86 net orders during the quarter, up from 61 in the year-ago period.
Bombardier's aerospace unit got a major lift in March from a massive order of up to 120 business jets from Warren Buffett's NetJets Inc, a deal that could be worth as much as $6.
Revenue at the transportation division was up 9 percent at $2.5 billion.
Bombardier's stock leapt as high as C$7.25 on the Toronto Stock Exchange on Wednesday but was last at C$7.08, a gain of 33 Canadian cents or nearly 5 percent. The stock has gained some 35 percent so far this year.
(Editing by Frank McGurty and Rob Wilson)