Bombardier turning around

Photo: The Canadian Press

The corporate logo of Bombardier is shown. Bombardier Inc. expects its revenue to grow to between US$17 billion and US$17.5 billion next year. THE CANADIAN PRESS/HO

Bombardier Inc. says it's on track to deliver on its promised five-year turnaround in 2020 as its aerospace and railway divisions are projected to deliver better revenues and profits.

Chief executive Alain Bellemare told a New York investor day Thursday that the transportation giant has a strong runway for growth now that it is winding down heavy spending to develop the C Series and Global 7000 business jet.

"The transformation of Bombardier is well underway and with the significant investment cycle coming to an end we have the right foundation in place to drive profitable growth for years to come," he told analysts.

The Montreal-based transportation company said revenues will grow to between US$17 billion and US$17.5 billion next year.

That's up by about US$1 billion from its guidance for 2017 at the mid-point of the range.

However, analysts on average had expected revenue to grow to about $18.4 billion next year, according to Thomson Reuters.

Bombardier said the growth in revenue is expected to be driven by the ramp-up of key projects at Bombardier Transportation and higher C Series aircraft deliveries.

Over the next three years, the company's objective is to grow revenue by US$4.0 billion to reach US$20 billion, which represents a seven per cent compound annual growth rate.

It also aims to improve the free cash flow by about US$1 billion to break even in 2018 and generate US$750 million to US$1 billion of cash in 2020.