- Bombardier (OTCQX:BDRAF, OTCQX:BDRBF) may need to take a significant writedown on its CSeries program, and could even find a sale of the entire project as a viable option, according to Scotiabank analyst Turan Quettawala.
- The analyst expects normalized CSeries deliveries of ~65/year for the next 10 years, but the result generates negative value for the company at a program cost of $5.4B; even using management’s "optimistic forecasts" of ~100 planes/year, Quettawala thinks the program generates zero to negative value over 20 years now that the project cost has ballooned by more than $2B.
- Quettawala says selling the CSeries could be a viable option for Bombardier, as it could help the company recoup half or more of its project cost, but he is "not sure if management is willing to throw in the towel just yet or if the political climate would allow this scenario to occur."
- Meanwhile, Bombardier has canceled the investor day it had scheduled for next week and may not hold one at all this year.