Bombardier, which manufactures planes and trains, also sought to allay worries about the pace of its cash burn after posting higher revenues but lower net income.

Bombardier is in talks with Russian state-owned industrial and defense conglomerate Rostec to open a manufacturing facility for the Canadian firm's Q400 turboprop jet.

The European Union, U.S. and Canada have ratchet up sanctions against Russia over the conflict in Ukraine.

"We're working hard to get to an agreement, so what's going on in Russia has not affected our commercial discussions," Chief Executive Pierre Beaudoin. "This is a situation that evolves every day."

The company last week said it will restructure its aerospace division, bruised in recent years by multiple delays in its cash-draining CSeries program and by shrinking market share for its existing aircraft portfolio.

Test flights on the CSeries were grounded two months ago due to an engine problem and Bombardier reiterated that tests were expected to resume "in the coming weeks" without giving further details.

The ambitious CSeries, which Bombardier hopes will dominate the 100-to 150- seat market, is already 18 to 24 months behind schedule.

Bombardier's stock, down more than 20 percent this year, was off 1.6 percent on the Toronto Stock Exchange.

Bombardier, which last week said it would restructure its aerospace business and chop 1,800 jobs, said on Thursday that further cost cuts, including eliminating 1,000 jobs in the transportation unit, were aimed at lifting profitability in that segment.

BMO Capital Markets analyst Fadi Chamoun said the Montreal-based firm had had "a mixed quarter".

"While results are in line, free cash flow goals and (Bombardier Transportation's) EBIT margin target for the year appear challenging to achieve," he said in a note to clients.

The aerospace unit delivered a total of 62 aircraft during the second quarter ended June 30, up from 57 deliveries a year earlier.

Aerospace revenue rose 11.4 percent to $2.51 billion in the quarter, while revenue at its transportation business climbed 9.4 percent to $2.36 billion.

Total revenue rose 10.4 percent to $4.89 billion.

Bombardier's net income fell 14 percent to $155 million, or 8 cents per share, in the quarter.

On an adjusted basis, Bombardier earned 10 cents per share. That was slightly higher than the average analyst estimate of 9 cents per share, according to Thomson Reuters I/B/E/S.

Bombardier's cash flow usage fell about 25 percent to $424 million during the quarter.

Liquidity stood at $3.9 billion as of June 30, including cash and cash equivalents, which Bombardier said was enough to carry it through to the CSeries' entry into service, expected sometime in the second half of 2015.

(Reporting by Solarina Ho in Toronto and Sneha Banerjee in Bangalore; Editing by Savio D'Souza, Bernard Orr)