By Allison Lampert and Nivedita Bhattacharjee
(Reuters) - Canadian plane and train maker Bombardier Inc posted a 7 percent rise in a key profit measure for the second quarter and its cash burn was much better than expected, putting it firmly on track to break even on cash flow this year.
Bombardier's cash burn was about $370 million for the quarter. That figure was a big improvement over expectations of $532 million, BMO Capital analysts said.
The Montreal-based company is in the middle of a turnaround, after spiraling investments in its CSeries jet program almost landed the company in bankruptcy in 2015. The company had $9.1 billion in long-term debt.
It has since offloaded a majority stake in the money-losing commercial jet to Europe's Airbus, which has pledged to boost sales and cut costs of the plane that has been renamed the A220.
"With our heavy investment cycle largely behind us, our focus is now on ramping-up production and improving operational efficiency to accelerate growth," Chief Executive Officer Alain Bellemare said.
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The company's transportation unit, which builds trains, posted an 11 percent rise in revenue. That drove its total revenue to $4.26 billion, up 3 percent from a year earlier.
Earnings before interest, taxation, depreciation and amortization (EBITDA) rose to $336 million from $313 million a year earlier. Adjusted EBITDA margin was up 7.9 percent from 7.6 percent last year.
Bombardier also reaffirmed its forecasts, including revenue https://ir.bombardier.com/modules/misc/documents/08/85/21/33/15/Bombardier-Quarterly-Report-Q2-2018-en.pdf of $16.5-$17.0 billion for the year.
Last month, the company had raised its 2018 forecast for consolidated earnings before interest and tax by $100 million to a range of $900 million to $1 billion, to reflect the separation of the loss-making CSeries.
"With Bombardier now through the midway point of the year, it should comfortably meet or exceed its 2018 guidance," CIBC Capital Markets analyst Kevin Chiang said.
(Reporting By Nivedita Bhattacharjee and Allison Lampert; Editing by Gopakumar Warrier, Bernard Orr)