Kristine Owram, THE CANADIAN PRESS

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TORONTO - Diversified investment company Onex Corp. (TSX:OCX) lost $180 million in the third quarter, largely due to impairment charges at its Hawker Beechcraft aviation business, which has suffered from a significant decline in demand for corporate jets.

Hawker Beechcraft recorded total impairment charges related to goodwill, intangibles and other assets of US$726 million in the quarter, which impacted Onex's net earnings by C$146 million, said chief financial officer Donald Lewtas.

Chairman and CEO Gerald Schwartz said he expects Hawker will continue to face headwinds through 2010.

"Although the company is somewhat insulated because of its very significant aftermarket military and government business, the reduced demand for business jets has meaningfully impacted 2010," Schwartz said Wednesday on a conference call with analysts.

"We are, though, pleased to report that under the leadership of Hawker's new CEO, Bill Boisture, the company has aggressively lowered costs and is managing capital expenditures very carefully."

Schwartz said Onex's other businesses have largely proven themselves to be adaptable, with many maintaining margins despite "considerable revenue declines" by slimming down their operations.

Onex's third-quarter loss amounted to $1.48 per share compared to net earnings of $38 million or 30 cents per share in the third quarter of 2008. Revenues declined 14 per cent to $6.1 billion from $7.1 billion a year ago.

Schwartz said improving equity markets helped to partially offset the loss at Hawker Beechcraft in the third quarter, as Onex was able to sell shares in two of its holdings for a significant gain on the initial investment.

In the quarter, Onex sold 3.5 million shares of Emergency Medical Services (NYSE:EMS) for a gain of $90 million, or six times the initial investment. It also sold 11 million shares in electronics company Celestica (TSX:CLS) for $104 million, also representing a gain of about six times its capital outlay.

"If the equity markets continue to strengthen, this may well provide an opportunity for additional offerings that would generate attractive returns on our invested capital as well as liquidity for future investments," Schwatz added.

He said the current environment is creating some attractive acquisition opportunities, and looser credit markets mean financing is available again for mid-sized and selected larger transactions.

"Looking ahead, we continue to believe this environment will create the greatest potential for value investors like Onex with experience in corporate carve-outs, distressed-for-control investing, and restructuring generally," Schwartz said.

"We also recognize a transaction will require significant amounts of equity until the debt markets more fully recover. However, these are circumstances we're comfortable with because we've had a long-standing conservative approach to financial leverage, and a considerable amount of cash and committed third-party capital available to us makes these large equity investments very, very available and possible."

Onex said it expects the majority of its investments going forward to be in the leveraged buyout business, with a focus on companies headquartered in Canada or the United States but with global operations.

By industry segment, Onex's electronics manufacturing services business saw revenues of $1.7 billion, down from $2.1 billion. Aerostructures had revenues of $1.2 billion, up from $1.1 billion, health-care was steady at $1.6 billion and financial services was down from $338 million to $322 million.

Onex's businesses generate annual revenues of $33 billion, have assets of $40 billion and employ 211,000 people worldwide. The Onex companies operate in a variety of industries, including sugar production, manufacturing, real estate, health-care, aerospace, movie theatres and gaming.

Shares in Onex, which reported after markets closed, added 17 cents to $24.10 in Wednesday trading on the Toronto Stock Exchange.