Brazil's Embraer beats profit estimates as deliveries jump
BRAZILIAN planemaker Embraer on Monday (Aug 14) beat market estimates for second quarter results, boosted by a 47 per cent jump in aircraft deliveries year-on-year, and reaffirmed its full-year outlook.
Shares in the company rose as much as 5.7 per cent immediately after the report, before paring gains to trade down 1.5 per cent, in line with Brazil’s benchmark stock index Bovespa stock.
The world’s third-largest plane manufacturer – after Airbus and Boeing – reported a 25 per cent increase in second quarter adjusted net profit to US$57.9 million, more than double the US$24.3 million forecast by analysts polled by Refinitiv.
The Brazilian company had previously disclosed deliveries of 47 aircraft in the quarter, seen as a positive sign by analysts who believe Embraer will meet its target of delivering up to 200 jets this year.
In the second quarter, Embraer’s adjusted earnings before interest, taxes, depreciation and amortisation (Ebitda) came in at US$148.9 million, up 20 per cent from the previous year and also above the market consensus of US$116.2 million.
JPMorgan analysts highlighted as particularly strong its Ebitda margin of 11.5 per cent, up 10 percentage points quarter-on-quarter, and its overall guidance of 10 per cent to 11 per cent.
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Embraer maintained its outlook for deliveries and financial results for the year.
It expects to deliver 65 to 70 commercial aircraft this year, up from 57 in 2022, and that executive jet deliveries will increase by as much as 27.5 per cent to between 120 and 130.
Deliveries tend to increase in the second half, which is seasonally busier for planemakers.
Chief executive Francisco Gomes Neto told analysts in a call that Embraer also expected to add new orders in the final months of the year, saying there are several ongoing sales campaigns, mainly in the commercial and defence units.
Net revenue for the year is forecast to rise by as much as 27 per cent to between US$5.2 billion and US$5.7 billion, the company said. REUTERS
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