Train and aircraft manufacturer Bombardier increased its net income in the first quarter 186 percent on revenue that grew 21 percent. For the first quarter ended April 30, net income reached $226 million, compared with $79 million in the same period last year. Revenue increased from $4 billion to $4.8 billion.
The company's CEO credited order intake and "rigorous discipline in reducing costs." Indeed, the order backlog climbed to $55.5 billion from $53.6 billion at the end of January. The most significant cost cutting came in the form of lower financing expense and a lower tax rate.
Net financing expense amounted to $21 million for the first quarter, compared to $69 million for the corresponding period last year. The $48-million decrease is mainly due to higher interest income on cash and cash equivalents, lower interest expense on long-term debt and a net gain on financial instruments; partially offset by lower financing income on loans and lease receivables, Bombardier said.
The effective income tax rate was 24.7 percent for the first quarter, compared to the statutory income tax rate of 31.5 percent and an effective rate of 30.7 percent for the same period last fiscal year. The lower effective tax rates are mainly due to the net change in the recognition of tax benefits related to operating losses and temporary differences and to the lower effective income tax rates of foreign investees, partially offset by permanent differences.
"At Bombardier Aerospace, both business and commercial aircraft enjoyed good demand as demonstrated by the level of net orders and deliveries. Bombardier Transportation received a steady flow of new orders for a book-to-bill ratio of 1, which is strong in a context of a 41 percent increase in revenues. With an overall backlog of $55.5 billion, both groups are well positioned to deliver continued profitable growth," said Laurent Beaudoin, chairman of the board and CEO.
Laurent Beaudoin relinquished his position as CEO on the same day as the release of the quarterly report. He will remain as chairman of the board. Pierre Beaudoin assumed the position of president and CEO.
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