Bombardier Set to Report

First quarter results ready to land on Thursday. Will the stock take off?

Iain Butler

Chief Investment Advisor, Motley Fool Canada Fool since November 2012 Iain Butler, CFA, is Lead Advisor on Discovery Canada 2017. He is also the Chief Investment Advisor for Motley Fool Canada and is the lead advisor on its flagship Stock Advisor Canada product. Before joining the Fool, Iain was a “buy-side” analyst and through this experience is well-versed in the idiosyncratic ways of the Canadian market. His investing interests are centred on scouring the market for interesting businesses that trade at reasonable prices and offer an appealing risk/reward relationship. Since joining the Fool in 2012, Iain dedicates each day to spreading Foolishness throughout this great country!

Published May 7, 2013 11:49 am EDT

Bombardier (TSX:BBD.B) is scheduled to release its quarterly results on Thursday, May 9^th. Given the many moving parts embedded within Bombardier’s business, quarterly numbers are a tough thing to predict. This results in a wide range of estimates and can result in large swings in the company’s stock price on earnings days.

According to Capital IQ, analysts currently expect Bombardier to have earned $0.08 per share in the first quarter on revenues of $4.2 billion. Although EPS of $0.08 looks good compared to last quarter’s EPS of $0.00, 12 months ago analysts were estimating Bombardier would earn $0.13 in this quarter. Expectations have clearly been reigned in.

Items to watch

Aside from the bottom line, two other items to keep an eye on are the company’s margins and any further updates on the soon-to-be flying C-Series aircraft.

Tabled below are the EBIT margins from BBD’s past 4 quarters. The market wants to see an improvement here in Thursday’s release.

	Q1’12	Q2’12	Q3’12	Q4’12
EBIT Margin	4.7%	5.1%	4.7%	3.4%

Source: Capital IQ

The market also wants to see that the company remains on target to begin flying its new C-Series aircraft by the end of June. The company’s short sellers would love to see further delays announced for this project as the stock price would take a hit.

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Fool contributor Iain Butler does not own shares in any of the companies mentioned in this report at this time. The Motley Fool has no positions in the stocks mentioned above.