(Reuters) -Canadian business jet maker Bombardier Inc on Tuesday raised its 2022 forecast for revenue and free cash flow above analysts’ expectations, helped by robust demand for private planes.
Montreal-based Bombardier, which also took steps to reduce the cost of its debt, now expects full-year revenue to come in at about $6.9 billion, up from a prior outlook of about $6.5 billion. Analysts on average expected the company to post annual revenue of $6.56 billion, according to Refinitiv data.
Bombardier’s shares rose 4% in morning trade in Toronto following the announcement, which precedes the company’s fourth-quarter and full-year 2022 results on February 9.
Corporate jet makers have reported swelling order backlogs on persistent strong demand for private flying, especially in the United States, the world’s largest market for business aviation.
That trend has benefited Bombardier, whose stock has risen about 31% in the past year, along with rivals Gulfstream business jet maker General Dynamics Corp and Cessna jet maker Textron Inc, which report earnings on January 25.
But industry consultancies like WINGX forecast private flying in North America to moderate in 2023, after two years of record highs, and expect softening in the charter market.
Private planemakers also face pressure from supply chain and labor disruptions as well as soaring inflation and broader concerns over a softening global economy.
Bombardier, which faced a cash crunch in 2015, is focused on lowering its debt, which dropped by $100 million during the third quarter.
The company on Tuesday also launched a process to push out debt payments at a lower rate.
Bombardier, which has a worldwide fleet of about 5,000 aircraft in service, said it expects its full-year free cash flow to be about $735 million, compared with its prior estimate of $515 million.
(Reporting by Nathan Gomes in Bengaluru and Allison Lampert in Montreal; Editing by Sherry Jacob-Phillips and Emelia Sithole-Matarise)