Bombardier reported a 14 percent fall in first-quarter profit as aircraft deliveries declined and new orders for its train division were flat.
The world's third-biggest commercial plane maker said new orders for business jets were strong and it is seeing a pick-up in commercial aircraft orders as well.
Bombardier is investing USD$3 billion to develop the 110- to 149-seat C-Series, its biggest aircraft yet, but it has been met with sluggish demand.
"We're making good progress on our development... as we target the first flight of the C-Series aircraft by the end of this year," chief executive Pierre Beaudoin said in a statement.
Bombardier competes with Brazil’s Embraer in the smaller regional jet market and will take on Airbus and Boeing with its new C-Series jet.
The company in March forecast a weaker-than-expected 5 percent profit margin for its aerospace unit in 2012, down from 5.8 percent in 2011.
It said higher currency and pension costs would hurt margins as it faces sluggish demand for its regional jets.
For 2012, the company has said it expects to deliver 180 business jets and 55 regional aircraft.
Bombardier said free cash flow usage was USD$712 million, compared with USD$409 million last fiscal year.
Net profit in the first quarter fell to USD$190 million, from USD$220 million a year earlier.
Revenue declined 25 percent to USD$3.50 billion.
Revenue at the aerospace division, which manufactures business, commercial and amphibious aircraft, fell to USD$1.5 billion from USD$2.2 billion a year earlier.
While business jet deliveries were down due to transition to the new Vision Flight Deck, commercial aircraft fell mainly on lower production rates, the company said in a statement.
The overall plane and train order backlog increased to USD$55.2 billion at the end of March, from USD$53.9 billion at the end of December.