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Higher shipments of business jets at plane maker Bombardier helped offset a 33 percent sag in quarterly regional aircraft deliveries, but the company said on Wednesday it is looking for ways to cut costs and boost profit margins.

Bombardier, the world's third-largest civil aircraft manufacturer, earned USD$58 million in the second quarter ended July 31.

That was down from a profit USD$117 million a year earlier when results were boosted by a gain on the sale of the inventory finance business of the company's Bombardier Capital unit.

Income from continuing operations was USD$57 million, compared with USD$10 million a year earlier.

Second-quarter income before interest and taxes fell at the company's aerospace division to USD$66 million from USD$76 million, while profit at its rail unit rose to USD$60 million from USD$43 million.

Fadi Chamoun, an analyst at UBS Investment Research, said Bombardier's aerospace margins came in below expectations.

«Aerospace margins were disappointing at 2.9 percent versus our estimate and second quarter 'O6 (margin) of 3.9 percent,» he wrote in a research note on Wednesday.

«Improving Bombardier Aerospace's margins continues to be a challenge and we are aggressively pursuing all opportunities to reduce our cost base,» Laurent Beaudoin, Bombardier's chairman and chief executive, said in a statement.

Bombardier's overall revenues slipped to USD$3.5 billion from USD$3.6 billion, mainly because of fewer deliveries of regional jets and lower mainline revenues in its railcar making unit in Britain and Germany.

Bombardier said it delivered 75 aircraft in the quarter, down from 81 a year earlier. The deliveries consisted of 48 business jets, up from 41 a year earlier and 26 regional aircraft, down from 39.

The company delivered one amphibious plane, the same as in the year earlier period.

Bombardier received 67 net orders for business jets in the quarter, up from 51 a year earlier, but only nine net orders for regional aircraft, down from 11 in the year earlier quarter.

Analysts say Northwest Airlines, Delta Air Lines and US Airways are key to boosting the order flow for Bombardier's regional jets.

The company needs significant new orders to keep production at its current level of seven to eight regional jets a month, Robert Fay, analyst at Canaccord Adams wrote in a research report on Tuesday.

Northwest may already have made a decision on whether to order up to 70 regional jets seating 70 passengers from either Bombardier or its Brazilian rival Embraer, Fay wrote. Delta may also place an order for up to 50 regional jets seating 76 passengers.

Revenues for Bombardier's train making unit slipped to USD$1.62 billion versus USD$1.67 billion. Order intake for the quarter totaled USD$1.9 billion, up USD$347 million from a year earlier.

Bombardier's order backlog stood at USD$10.9 billion in aerospace, up from USD$10.7 billion in January, and USD$22.2 billion in rail, up from USD$20.9 billion in January.

On Sunday, a Bombardier CRJ100 50-passenger jet crashed on takeoff in Kentucky, killing 49 people on the Comair flight. Investigators said the jet appeared to have taken off from the wrong runway, which was too short for the jet.

(Reuters)