Bombardier hikes cash forecast as questions mount over capital deployment

Canadian plane maker Bombardier Inc. BBD-B-T has raised its annual free cash flow forecast for the second time this year, reporting solid financial results as shareholder attention now turns to what it will do with its excess capital in the months ahead.

The Montreal-based multinational said it generated a 3-per-cent increase in revenue during its latest quarter ended Sept.30, to US$2.37-billion, and delivered 33 jets. Its aircraft service business surpassed the US$700-million revenue mark for the first time.

Free cash flow climbed US$31-million from the same period last year to US$183-million. That prompted Bombardier to hike its guidance for that metric again: It now expects to generate more than US$1.3-billion in free cash flow this year, up from a previous forecast of at least US$1-billion.

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Adjusted earnings before interest, taxes, depreciation and amortization increased 7 per cent year-over-year to US$382-million for the quarter while adjusted earnings per share rose to US$1.72. On that basis, analysts were expecting EBITDA of US$375-million and EPS of about US$1.68.

Diluted earnings per share came in at 73 U.S. cents compared with 77 U.S. cents in the third quarter of 2025.

Chief executive Éric Martel has steered a major turnaround at the aircraft manufacturer over six years that has seen it claw back investor credibility as a result of consistent financial improvement. The CEO and finance chief Bart Demosky have parlayed strong demand for private air travel into a multiyear order backlog while expanding the defence and services businesses and improving operating margins.

Bombardier will end the year with a net debt-to-EBITDA ratio of just 1.2 times, National Bank analyst Cameron Doerksen calculates. With no debt maturities until 2030 and no need to invest to develop an all-new aircraft program in the near and medium term, the key question is how the company will approach capital deployment in coming years, the analyst said in a recent research note.

The Montreal company has signalled that it is looking at possible acquisitions to boost its service business, and could also make takeovers in the defence space. The manufacturer said in September that it would buy the assets of MHI Canada Aerospace Inc. from Japan’s Mitsubishi Heavy Industries Ltd., an agreement that will see Bombardier take over the operations of one of its key suppliers and bring its roughly 750 employees in-house.

Mr. Doerksen said he believes Bombardier could reinstate a dividend, something that would likely be supported by the company’s founding Bombardier-Beaudoin family. Another option would be to introduce a larger and more active share buyback program.

Investor fears that Donald Trump would act to undermine Bombardier’s business in the United States have eased after the U.S. President signalled last month he won’t make good on his past threats, saying he “just found out” the company had a base in Kansas. The plane maker announced shortly after that it would expand its presence south of the border with plans to hire hundreds of new workers and spend US$270-million on new infrastructure.

Bombardier currently employs about 3,500 people directly in the U.S. and supports thousands more U.S. jobs through a network of 2,800 suppliers