*

High deliveries, demand boost net income beyond

expectations

*

Free cash burn at $164 million, surpassing analyst

expectations

*

Delivered 36 business jets this quarter, down from 39 last

year

*

CEO Martel highlights strong demand in defense markets

By Dan Catchpole and Aatreyee Dasgupta

July 31 (Reuters) - Business jet maker

Bombardier's reported second-quarter revenue on

Thursday that was down slightly, though net income beat

analysts' expectations, driven by higher airplane deliveries and

orders, and strong demand for parts and repairs.

The Canadian company burned through $164 million of free

cash during the quarter, far above the roughly $41 million that

analysts had expected.

The cash burn, a figure closely watched by investors, was

largely due to stocking inventory ahead of increased production

in the second half of the year.

Bombardier capped the second quarter with a $1.7-billion

from an unidentified customer for 50 firm orders of its

Challenger and Global aircraft, plus a service pact and options

for 70 more, taking the value of its backlog to $16.6 billion.

The planemaker delivered 36 business jets in the quarter,

down from 39 in the year-earlier period.

"Demand for our products and services remains strong in

traditional business jet markets and continues to garner new

opportunities in defense markets," CEO Eric Martel said in a

statement.

At the Paris Airshow in June, he added, "Bombardier Defense

deepened existing ties, forged new ones and secured strategic

orders."

But the company continues to contend with the economic

uncertainty of U.S. President Donald Trump's aggressive use of

tariffs. In early July, Trump called for a 35% tariff on imports

from Canada, set to begin from Friday.

Much of Bombardier's supply chain and its aircraft are

exempt from tariffs under the United States-Mexico-Canada

Agreement (USMCA), but Trump has not made a final decision on

the tariffs.

The Montreal-based company posted quarterly revenue of $2

billion, down from $2.2 billion a year ago.

On an adjusted basis, it earned $1.11 a share in the second

quarter, versus $1.04 a year earlier, to beat analysts' average

projection of $1.06.