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To: Slumdog who wrote (146226)	8/26/2002 3:19:22 PM
From: H James Morris	Read Replies (1) \| Respond to of 164685

Saturday, August 24, 2002 BLOOMBERG NEWS MONTREAL -- Shares of Bombardier Inc. yesterday fell 22 percent, their biggest drop ever, after the world's No. 3 maker of commercial aircraft said fiscal 2003 profit will decline because the slumping U.S. economy has thinned demand for its Learjets and other corporate and small airplanes. Profit will be 70 Canadian cents (45 cents U.S.) a share in the year ending Jan. 31, Montreal-based Bombardier said in a statement without disclosing all of the costs and items included. The company expected to earn 89 cents (57 cents U.S.), up from a year-earlier 81-cents profit, which excluded goodwill amortization and other items. Investors have said for months that Chief Executive Officer Robert Brown wouldn't meet his target of increasing earnings by 10 percent this year. U.S. airlines account for more than two-thirds of Bombardier's jet sales. Travel has declined since the Sept. 11 attacks, and businesses are buying fewer private jets. "If your clients are in bad shape, you're in bad shape, too," said Stephen Gauthier, a money manager at Pictet & Co., which sold about one-third of its Bombardier shares this year. Bombardier said that part of the shortfall is related to costs for used aircraft, after US Airways Group Inc. filed for bankruptcy protection this month. Bombardier spokeswoman Dominique Dionne declined to provide details. The airline probably isn't making lease payments on some Bombardier jets during the bankruptcy proceedings, said Richard Aboulafia, an analyst with the Teal Group in Fairfax, Virginia. Brown said in June that he would boost profit, even as airliner demand slumped, on sales of trains and on items such as snowmobiles. In the past month, Bombardier lost a $2.36 billion order for New York subway cars and got in a public dispute with Amtrak, the U.S. passenger railroad, over cracks in Acela trains that it helped design. The Class B shares of Bombardier fell C$2 to C$7.01 ($4.50 U.S.), their lowest level since 1998, at 4:49 p.m. in Toronto Stock Exchange trading. They have declined 58 percent this year. The company plans to report second-quarter earnings on Tuesday. Bombardier makes Learjet corporate planes, de Havilland propeller-driven planes and 50-seat Canadair regional jets flown by commuter airlines. Brown, who became CEO in 1999, increased profit by 30 percent in each of his first three years as the stock more than tripled and jet sales almost doubled. seattlepi.nwsource.com