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New Flyer reports lower profits, but beats forecast

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Winnipeg bus-maker New Flyer Industries released lower sales and profits results for the fourth quarter last night and the share price has dipped three per cent this morning to $10.13.

But the results are better than analysts had forecasted and the share price is still near its 52-week high.

Total revenue was down 18.5 per cent in the quarter to $209.9 million and bus revenue was down 20.5 per cent

That’s mostly attributed to the fact that the number of equivalent bus units delivered in the quarter was down 17.7 per cent, which the company said was primarily as a result of a supplier quality issue that’s been taken care of, and the temporary delay in receiving a notice to proceed for an order from New York City Transit Authority.

Even the company’s aftermarket revenue decreased slightly — 1.6 per cent — to $28.9 million in the quarter due to the company’s discontinuation of used bus sales.

Consolidated adjusted EBITDA of $14.5 million was down 8.8 per cent compared to the same period in 2011 and net earnings of $3.9 million in the quarter were much less than the $15.6 million record for the fourth quarter last year but that included a one-time recognition of investment tax credits.

Trevor Johnson, an analyst with National Bank Financial, said despite a lot of negative numbers, the results were not a surprise and in fact were slightly better than anticipated.

"I was happy as can be. They said fourth quarter was going to be like the third quarter and they beat our EBITDA forecasts," he said. "I was fine with the quarter. It was more or less bang-on what we were looking for."

Johnson has forecasted EBITDA of $14.2 million and the company came on at $14.5 million.

"It was very much as articultated," he said. "I’m telling my clients the pullback (in the stock price) could be used as a buying opportunity."

Total revenue for the full year was off 5.8 per cent to $872.9 million, EBITDA was down 23.1 per cent to $61.6 million and net earnings was down 6.1 per cent to $9.8 million.

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