Bombardier Inc. fell the most on record after warning of disappointing fourth-quarter sales and revealing that it may exit a joint venture with Airbus SE that makes the A220 jetliner, potentially triggering a major writedown.
A ramp-up in A220 production will require additional cash investment, pushing back the break-even point and generating lower returns across the lifetime of the project, Bombardier said in a statement Thursday. The value of the A220 joint venture is likely to be diminished and the amount of any accounting charge will be disclosed with full 2019 results next month, the company said.
The potential end of Bombardier’s involvement in the A220 program is combining with new stumbles in the company’s rail business to undermine a once-great name in manufacturing — just when investors thought they were poised to reap the rewards of a difficult turnaround effort. Walking away from the A220 would close the book on Bombardier’s involvement in an aircraft program in which the company invested more than US$6 billion.
“The joke continues. Anyone involved with the story has a gun to their head,” said John O’Connell, chief executive officer of Davis Rea Ltd., who doesn’t hold Bombardier shares or bonds. “This company has been a disaster my whole career and I’m almost ready to retire.”
Bombardier plunged 30 per cent to US$1.25 at 12:56 p.m. in Toronto after sliding as much as 39 per cent for the biggest intraday tumble on record. That dragged shares to the lowest level in almost four years.
The company’s 7.85 per cent bonds due 2027 fell 6.2 cents, the most on record, to 96 cents on the dollar, yielding 8.6 per cent, according to Trace data. The US$1.5 billion in notes due 2025 dropped 3.9 cents to 98.1 cents on the dollar to yield 8 per cent, the highest since Oct. 31.
Bombardier needs to ‘just deliver’ what they promise: McGill’s Karl Moore
Karl Moore, professor of business strategy at McGill University, joins BNN Bloomberg to react to Bombardier slashing its outlook, warning on cash burn and considering pulling out of the A220 partnership with Airbus. He says that CEO Alain Bellemare has done an excellent job in a tough turnaround for the business.
Disappointing Sales
Bombardier, which is refocusing its operations on rail equipment and business jets, said fourth-quarter sales would be US$4.2 billion, trailing the lowest analyst estimate in a survey by Bloomberg
The results were dragged down in part by new challenges in the company’s faltering rail division, which generates about half of sales. The business got a black eye this month when New York removed 300 Bombardier-made subway cars from service because of door glitches. For the fourth quarter, the manufacturer said it would take a US$350 million accounting charge because of problems in London, Switzerland and Germany.
The timing of milestone payments also clipped results late last year, Montreal-based Bombardier said. So did the delay of some deliveries of the Global 7500 business jet into the first quarter of 2020.
Liquidity remains strong, with year-end cash on hand of roughly US$2.6 billion, Bombardier said. But the company is considering alternatives to accelerate debt reduction and strengthen its balance sheet. Full results are scheduled for Feb. 13.
“The final step in our turnaround is to de-lever and solve our capital structure,” Chief Executive Officer Alain Bellemare said in the statement. “We are actively pursuing alternatives that would allow us to accelerate our debt paydown.”
Trouble is, Bombardier may be running out of sizable assets to sell to meet its cash needs, said Bloomberg Intelligence analyst George Ferguson.
“Bombardier needs to get its rail business — the earnings and cash-flow driver — on track, while restructuring its aviation division in a soft business-jet market,” he said in a report.
Commercial-Jet Retreat
The potential end of Bombardier’s involvement in the A220 program would cap the company’s broader retreat from commercial-plane manufacturing.
Bombardier ceded control of the A220 last year to Airbus for no upfront cash. The plane — originally known as the C Series — won praise for its fuel-efficient engines, composite wings and large windows. But the program ran more than two years late and about US$2 billion over budget, and Bombardier had trouble finding buyers in an industry dominated by Airbus and Boeing Co.
Airbus said it would continue funding the A220 program “on its way to break-even.” The European aerospace giant owns a 50.01 per cent stake in the regional jet, with Bombardier retaining 31 per cent and state-backed Investissement Quebec holding some 19 per cent.
The jet added 63 orders in 2019, with 105 currently in service and a backlog of close to 500 planes. Airbus will begin producing the A220 on a second assembly line this year at its factory in Mobile, Alabama.
Bombardier agreed last year to sell a plant in Belfast, Northern Ireland, that makes wings for the A220. The buyer, Spirit AeroSystems Holdings Inc., is seeking to boost its exposure to Airbus programs after suffering as a supplier to Boeing’s grounded 737 Max.
The Canadian company also agreed to sell its regional-jet program to Mitsubishi Heavy Industries Ltd.
Most job search advice is cookie-cutter. The advice you’re following is almost certainly the same advice other job seekers follow, making you just another candidate following the same script.
In today’s hyper-competitive job market, standing out is critical, a challenge most job seekers struggle with. Instead of relying on generic questions recommended by self-proclaimed career coaches, which often lead to a forgettable interview, ask unique, thought-provoking questions that’ll spark engaging conversations and leave a lasting impression.
Your level of interest in the company and the role.
Contributing to your employer’s success is essential.
You desire a cultural fit.
Here are the top four questions experts recommend candidates ask; hence, they’ve become cliché questions you should avoid asking:
“What are the key responsibilities of this position?”
Most likely, the job description answers this question. Therefore, asking this question indicates you didn’t read the job description. If you require clarification, ask, “How many outbound calls will I be required to make daily?” “What will be my monthly revenue target?”
“What does a typical day look like?”
Although it’s important to understand day-to-day expectations, this question tends to elicit vague responses and rarely leads to a deeper conversation. Don’t focus on what your day will look like; instead, focus on being clear on the results you need to deliver. Nobody I know has ever been fired for not following a “typical day.” However, I know several people who were fired for failing to meet expectations. Before accepting a job offer, ensure you’re capable of meeting the employer’s expectations.
“How would you describe the company culture?”
Asking this question screams, “I read somewhere to ask this question.” There are much better ways to research a company’s culture, such as speaking to current and former employees, reading online reviews and news articles. Furthermore, since your interviewer works for the company, they’re presumably comfortable with the culture. Do you expect your interviewer to give you the brutal truth? “Be careful of Craig; get on his bad side, and he’ll make your life miserable.” “Bob is close to retirement. I give him lots of slack, which the rest of the team needs to pick up.”
Truism: No matter how much due diligence you do, only when you start working for the employer will you experience and, therefore, know their culture firsthand.
“What opportunities are there for professional development?”
When asked this question, I immediately think the candidate cares more about gaining than contributing, a showstopper. Managing your career is your responsibility, not your employer’s.
Cliché questions don’t impress hiring managers, nor will they differentiate you from your competition. To transform your interaction with your interviewer from a Q&A session into a dynamic discussion, ask unique, insightful questions.
Here are my four go-to questions—I have many more—to accomplish this:
“Describe your management style. How will you manage me?”
This question gives your interviewer the opportunity to talk about themselves, which we all love doing. As well, being in sync with my boss is extremely important to me. The management style of who’ll be my boss is a determining factor in whether or not I’ll accept the job.
“What is the one thing I should never do that’ll piss you off and possibly damage our working relationship beyond repair?”
This question also allows me to determine whether I and my to-be boss would be in sync. Sometimes I ask, “What are your pet peeves?”
“When I join the team, what would be the most important contribution you’d want to see from me in the first six months?”
Setting myself up for failure is the last thing I want. As I mentioned, focus on the results you need to produce and timelines. How realistic are the expectations? It’s never about the question; it’s about what you want to know. It’s important to know whether you’ll be able to meet or even exceed your new boss’s expectations.
“If I wanted to sell you on an idea or suggestion, what do you need to know?”
Years ago, a candidate asked me this question. I was impressed he wasn’t looking just to put in time; he was looking for how he could be a contributing employee. Every time I ask this question, it leads to an in-depth discussion.
Other questions I’ve asked:
“What keeps you up at night?”
“If you were to leave this company, who would follow?”
“How do you handle an employee making a mistake?”
“If you were to give a Ted Talk, what topic would you talk about?”
“What are three highly valued skills at [company] that I should master to advance?”
“What are the informal expectations of the role?”
“What is one misconception people have about you [or the company]?”
Your questions reveal a great deal about your motivations, drive to make a meaningful impact on the business, and a chance to morph the questioning into a conversation. Cliché questions don’t lead to meaningful discussions, whereas unique, thought-provoking questions do and, in turn, make you memorable.
Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers “unsweetened” job search advice. You can send Nick your questions to artoffindingwork@gmail.com.
CALGARY – Canadian Natural Resources Ltd. reported a third-quarter profit of $2.27 billion, down from $2.34 billion in the same quarter last year.
The company says the profit amounted to $1.06 per diluted share for the quarter that ended Sept. 30 compared with $1.06 per diluted share a year earlier.
Product sales totalled $10.40 billion, down from $11.76 billion in the same quarter last year.
Daily production for the quarter averaged 1,363,086 barrels of oil equivalent per day, down from 1,393,614 a year ago.
On an adjusted basis, Canadian Natural says it earned 97 cents per diluted share for the quarter, down from an adjusted profit of $1.30 per diluted share in the same quarter last year.
The average analyst estimate had been for a profit of 90 cents per share, according to LSEG Data & Analytics.
This report by The Canadian Press was first published Oct. 31, 2024.
CALGARY – Cenovus Energy Inc. reported its third-quarter profit fell compared with a year as its revenue edged lower.
The company says it earned $820 million or 42 cents per diluted share for the quarter ended Sept. 30, down from $1.86 billion or 97 cents per diluted share a year earlier.
Revenue for the quarter totalled $14.25 billion, down from $14.58 billion in the same quarter last year.
Total upstream production in the quarter amounted to 771,300 barrels of oil equivalent per day, down from 797,000 a year earlier.
Total downstream throughput was 642,900 barrels per day compared with 664,300 in the same quarter last year.
On an adjusted basis, Cenovus says its funds flow amounted to $1.05 per diluted share in its latest quarter, down from adjusted funds flow of $1.81 per diluted share a year earlier.
This report by The Canadian Press was first published Oct. 31, 2024.
