Bombardier managed to fly above expectations again this quarter, despite economic headwinds that would have grounded less resilient aerospace manufacturers. The Montreal-based business jet maker reported a 14% increase in second-quarter profit on Thursday, continuing its impressive post-pandemic recovery trajectory even as new tariff costs strained its global supply chain.
The company posted adjusted earnings of $192 million for the quarter ending June 30, up from $168 million during the same period last year. Revenue climbed to $1.9 billion, representing an 8.2% year-over-year increase that exceeded analyst projections of $1.85 billion.
“We’re navigating through complicated terrain,” said Éric Martel, Bombardier’s CEO, during Thursday’s earnings call. “Supply chain challenges and tariff-related cost increases are real obstacles, but our multi-year transformation program has built enough operational resilience to absorb these pressures while still delivering growth.”
The strong performance comes despite the company absorbing approximately $23 million in additional costs directly attributed to tariffs implemented earlier this year. These trade measures, which affect aluminum components and various electronic systems sourced from multiple global suppliers, have forced Bombardier to reconfigure portions of its procurement strategy.
Demand for business jets continues to outpace pre-pandemic levels, particularly in Bombardier’s ultra-long-range Global series. The company delivered 32 aircraft during the quarter, up from 29 in Q2 2024, with a backlog valued at $14.7 billion providing visibility well into 2026.
“The high-net-worth segment remains relatively insulated from broader economic uncertainties,” noted Walter Casey, aerospace analyst at National Bank Financial. “When you combine that with corporations increasingly viewing private aviation as a productivity tool rather than a luxury, Bombardier’s position in the premium segment gives them significant pricing power.”
This pricing advantage has proven crucial for absorbing the impact of tariffs without sacrificing margins. Bombardier implemented a 3% price increase across its product lineup in April, which appears to have been accepted by the market with minimal resistance.
Service revenue, a key focus in Bombardier’s strategic pivot since divesting its commercial aircraft and rail divisions, grew by 12% year-over-year to $483 million. The company’s aftermarket business now represents approximately 25% of total revenue, providing a recurring income stream less vulnerable to economic cycles.
“We’ve transformed from a diversified transportation company into a focused business jet manufacturer with an expanding service network,” Martel explained. “This focus has allowed us to develop deeper expertise in fewer product lines while building customer relationships that span decades.”
The earnings report also highlighted progress in Bombardier’s sustainability initiatives. The company has now completed over 500 flights using sustainable aviation fuel (SAF) across its demonstration fleet, while its manufacturing facilities in Montreal achieved a 22% reduction in carbon emissions compared to 2019 baseline measurements.
On the financial front, Bombardier continued its deleveraging efforts by repaying an additional $300 million in debt during the quarter, bringing its total debt reduction to $1.2 billion since January 2024. The company’s leverage ratio now stands at 3.1 times EBITDA, down from 6.5 times in 2021.
“Their balance sheet transformation has been remarkable,” said Tara Wilson, industrial analyst at BMO Capital Markets. “Three years ago, we were discussing whether Bombardier could survive its debt load. Today, we’re talking about what they might do with increasing financial flexibility.”
That flexibility could be directed toward new product development, capacity expansion, or potentially returning capital to shareholders through dividends or buybacks – options that seemed implausible during the company’s financial struggles of recent years.
Not all metrics improved, however. Free cash flow generation slowed to $87 million compared to $112 million in the year-ago quarter, which the company attributed to increased inventory levels necessary to mitigate supply chain risks. Operating expenses also rose by 5.4%, outpacing inflation as Bombardier invested in production capacity and engineering talent.
Looking ahead, Bombardier maintained its full-year guidance for deliveries of 150-155 aircraft and revenue between $8.0-8.4 billion, suggesting confidence in its ability to navigate ongoing supply chain challenges and tariff impacts.
The company’s shares rose 4.2% in Toronto trading following the earnings release, bringing their year-to-date gain to approximately 18%.
For investors, Bombardier’s earnings demonstrate that certain manufacturing sectors can still thrive amid rising trade barriers – provided they have sufficient pricing power and operational flexibility. The company’s success also underscores the resilience of premium discretionary spending even as broader economic indicators flash warning signs.
As companies across multiple sectors grapple with rising tariff costs and supply chain realignments, Bombardier’s approach of building redundancies while investing in vertical integration offers valuable lessons. Whether these strategies will provide sustainable advantages as global trade tensions continue evolving remains the question that will define the coming quarters.
