Bombardier Inc. (BBD/B) jumped the most in two years in Toronto trading after quarterly profit rose 80 percent as the world’s third-biggest planemaker won business-jet orders and cleared out some inventory.

Net income increased to $318 million in the fourth quarter ended Jan. 31, Montreal-based Bombardier said in a statement today. Profit of 18 cents a share beat the 11-cent average estimate of 20 analysts surveyed by Bloomberg.

Demand is recovering for Bombardier’s bigger jet models amid a return of corporate profits. Bombardier won its largest aircraft order and the first from NetJets Inc. this month when the business-jet operator agreed to buy as many as 120 aircraft in anticipation of a rebound in luxury travel. Bombardier generated free cash flow of $605 million for the fiscal year.

“We had expected Bombardier to report positive free cash flow and the result was even better due to strong orders at both Bomardier Aerospace and Bombardier Transportation,” Fadi Chamoun, an analyst with BMO Capital Markets who rates the shares “outperform,” said in a research note.

Bombardier rose 70 Canadian cents, or 11 percent, to C$7.00 at 10.06 a.m. on the Toronto Stock Exchange, after touching C$7.07 for the biggest intraday gain since April 2, 2009.

Embraer SA (EMBR3), a Brazilian planemaker that competes against Bombardier, said last week that fourth-quarter profit surged 26 percent on higher plane deliveries.

Sales at Bombardier’s aerospace unit rose to $2.9 billion from $2.7 billion. Revenue at the transportation unit, which makes subway cars and locomotives, fell to $2.5 billion from $2.7 billion.

Order Backlog

Bombardier’s total order backlog swelled to $50.1 billion on Jan. 31. The company said Feb. 17 it would deliver about the same number of aircraft from February through December this year as it did in the 12 months of fiscal 2011 -- about 240 planes --as it begins to report on a calendar-year basis. The mix of deliveries will shift in favor of business jets, the company said.

“Bombardier has had a few recent positive surprises, and incremental order activity from here could keep it going,” Noah Poponak, a Goldman Sachs analyst, wrote in a March 3 note after the NetJets order announcement. He has a “neutral” rating on the stock.

The company expects to have 300 orders for the new CSeries commercial airliner, up from 90 now, by the time the 110-seat jet goes into service in 2013, Gary Scott, who runs the commercial aerospace division, said earlier this month.

The Aerospace unit’s order backlog reached $16.6 billion as at Jan. 31, a similar level to a year earlier, Bombardier said today.

“This is mainly due to an order received for the CSeries family of aircraft, offset by a lower order backlog for regional jets, turboprops and business aircraft,” the company said in the statement.

Net income was $177 million in the year-earlier quarter.

Airbus is the third-biggest planemaker behind Boeing Co. and Airbus.

To contact the reporters on this story: Howard Mustoe in London at [email protected]Susanna Ray in Seattle at [email protected].

To contact the editor responsible for this story: Benedikt Kammel at [email protected]Ed Dufner at [email protected]