MONTREAL — Bombardier Inc. revised its profit forecast for 2019 as it announced hundreds of millions in spending to ramp up capacity at its train-making unit following earnings that fell below analysts’ expectations.
The Montreal-based company plans to spend an additional US$250 million to US$300 million this year to ensure on-time project delivery, upping investment in manufacturing and engineering at Bombardier Transportation.
“We are making the necessary investments to ensure we have the right resources and capacity to deliver stronger, sustainable financial performance in the years ahead,” chief executive Alain Bellemare said on a conference call with investors Thursday.
Bombardier continues to struggle with a handful of contracts in its US$33.6 billion backlog at the rail segment, which saw adjusted core earnings fall 37 per cent year over year to US$146 million last quarter.
The company bumped down its core adjusted earnings guidance for 2019 to between US$1.2 billion and US$1.3 billion from US$1.5 billion and US$1.65 billion.
The announcement came as the Montreal-based company, which also makes aircraft, reported a US$36-million net loss and a US$47-million adjusted loss for the second quarter ended June 30.
The loss, reported in U.S. currency, amounted to four cents per diluted share before adjustments and compared with a year-earlier profit of $70 million or two cents per share.
Bombardier’s adjusted loss for this year’s second quarter was also equal to four cents per share, twice as much as the average analyst estimate from Refinitiv.
Revenue was $4.31 billion, up one per cent compared with $4.26 billion in last year’s second quarter and above analyst estimates.
Analysts had estimated an adjusted loss of two cents per share and revenue of $4.09 billion according to Refinitiv.
Last month, Bombardier announced it would lay off half of the 1,100 workers at its Thunder Bay, Ont., manufacturing plant.
Two of the plant’s major contracts — for the Toronto Transit Commission streetcars and Metrolinx GO Transit rail cars — are slated to wind down by the end of the year.