Bombardier Earnings: Second-Quarter Deliveries Were Impressive, but Margins Experienced Turbulence

Narrow-moat-rated Bombardier delivered a remarkable 39 business jets (20 Challenger, 19 Global) in the second quarter of 2024, up from 29 deliveries in the same period last year. Revenue grew 32% year over year to $2.2 billion as higher deliveries were complemented by considerable growth in aftermarket services. However, unfavorable mix eroded profitability, and adjusted EBIT margin fell 150 basis points year over year to 9.8%. An upward revision to our forecast for services revenue was offset by tempered margin assumptions, and we maintained our fair value estimate of CAD 92.