Canada Chief financial officer John Di Bert
Bombardier Inc on Thursday agreed to sell two of its units for around $900 million and cut 5,000 jobs to focus on business jets, but its shares fell as much as 26 percent on a disappointing free cash flow forecast.
READ MOREThe Canadian plane and train maker said it would only be able to meet its 2018 free cash flow estimate by using $635 million in proceeds from the sale of a Toronto plant earlier this year. Analysts had expected Montreal-based Bombardier to achieve its target of roughly breaking even on cash without relying on those proceeds.
"2018 free cash flow was lower than my expectations," said Morningstar analyst Chris Higgins.
Bombardier chief financial officer John Di Bert attributed the free cash flow discrepancy to higher-than-expected working capital needs in its rail division.
The company said the latest round of layoffs, which accounted for over 7 percent of its global workforce, will save Bombardier about $250 million by 2021. ■
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