ATW Daily News

Embraer posts earnings drop on fewer commercial deliveries

Tuesday August 4, 2009

Embraer reported that earnings for the second quarter fell 49.5% to $67.8 million compared to $134.4 million in the year-ago period largely owing to fewer higher-value commercial aircraft deliveries.

Total deliveries for the quarter numbered 56, up from 52 last year; however, the number of E-Jet deliveries declined from 41 to 33. It delivered 15 Phenom 100 microjets. Net revenue was $1.46 billion, down 10.9%, also owing to the different product mix between the quarters.

Second-quarter income from operations rose 54.2% to $174.6 million from $113.2 million, which Embraer said was owing to higher gross margins due to productivity gains achieved via the P3E efficiency program as well as "a strong control over the company's cost structure."

Revenue from the commercial aviation segment dropped 14.1% to $972.2 million and represented 66.7% of total revenue compared to 69.2% last year. As of June 30, the firm commercial backlog numbered 340 aircraft including 328 E-Jets. Total backlog including commercial, defense and business aviation was valued at $19.8 billion compared to $20.7 billion in the year-ago period.

Separately, it announced the delivery of the first E-190 to LAM Mozambique Airlines, which placed an order for two firm aircraft plus two options last fall. Aircraft seats nine in business class and 84 in economy.

by Perry Flint

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