) reported second-quarter earnings of 50 cents per American
Depository Shares (ADS), down 42.5% year over year from the
year-ago profit of 87 cents per ADS. The reported figure also
missed the Zacks Consensus Estimate of 65 cents by 23%.
Net revenue in the quarter was $1,557 million, down from $1,714.9
million in the year-ago quarter. Reported revenue, however,
surpassed the Zacks Consensus Estimate of $1,470.0 million.
With rising demand for regional aircraft, Embraer's firm order
backlog totaled $17.1 billion, reflecting a sequential increase
of $3.8 billion due to significant orders in the Commercial
Aviation segment. The backlog was highest since Sep 2009.
Embraer has delivered a total of 51 jets in the second quarter of
2013 ending Jun 30, 2013, which fell short of the 55 deliveries
made in the same period last year. Of the total, 22 jets were
delivered to the commercial aviation market including 14 of
E-190, 6 E-195, 1 E-175 and 1 E-170, while the remaining 29 jets
were delivered to executive aviation inclusive of 23 light and 6
In terms of aircraft breakdown, Embraer's order backlog comprises
149 E-175, 100 E-175-E2, 90 E-190, 19 E-195 and 8 E-170 jets.
revenues, comprising 55.3% of total revenue, declined 26.8% year
over year to $860.4 million.
, representing 23.7% of total quarterly revenue, delivered 29
jets (23 light jets and 6 large jets) during the reported quarter
compared with 20 deliveries in the second quarter of 2012.
Segment revenues grew 41.7% year-over-year to $369.6 million.
Defense & Security
generated revenues of $309.1 million that accounted for 19.9% of
total second-quarter sales and increased 17.2% from the year-ago
category accounted for 1.1% of total second quarter revenue
climbing almost 25.2% year over year to $17.9 million.
Cash and cash equivalents were $1,647.4 million at the end of the
reported quarter compared with $1,685.2 million at the end of the
second quarter of 2012.
As of Jun 30, 2013, the company's total debt was $2,224.2
million, up from $2,155.9 million as of Jun 30, 2012. Exiting the
second quarter 2013, Embraer's net cash from operating activities
was $412.8 million versus $190.5 million in the second quarter
2012. Capital expenditure was $124.8 million, up from $75.4
million in the second quarter of 2012.
Based on the performance in the first half of 2013 as well as the
expected increase in revenues during the second half of the year
(a function of the company's normal business cycle), the company
believes that it is on track to meet its delivery and revenue
targets for 2013. It expects Defense & Security and Executive
Aviation segments to represent a larger portion of total revenues
in 2013 when compared to 2012.
Embraer, in February this year, had projected total revenue in
the range of $5.9 billion to $6.4 billion for 2013. It also
expects to deliver 90 to 95 commercial jets, 80 to 90 light
executive jets and 25 to 30 large executive jets this year.
The company also expects to realize an EBIT margin between 13%
and 14% for the year.
Other Company Releases
Recently, defense and aerospace operator
General Dynamics Corp.
) announced second-quarter 2013 operating earnings of $1.81 per
share, surpassing the Zacks Consensus Estimate of $1.63 by 11.0%.
The Boeing Company
) reported stellar second quarter 2013 results, attributable to
solid performance across the company's businesses. Its adjusted
second quarter 2013 earnings came in at $1.67 per share, beating
the Zacks Consensus Estimate of $1.58 by 5.7% as well as the
year-ago profit of $1.48 by 12.8%.
The world's largest stand-alone defense contractor,
Lockheed Martin Corp.
) posted second quarter 2013 earnings of $2.64 per share,
comfortably surpassing the Zacks Consensus Estimate of $2.21 by
Though the company's top line succeeded in beating the Zacks
Consensus Estimate, the bottom line failed to do so. Also, top
and bottom line registered a year-over-year decline. This
reflects a combination of lower commercial aviation deliveries
and higher executive aviation deliveries.
Embraer is the leading manufacturer of 30-120 seat jets with a
strong global customer base based on the number of aircraft sold.
The company comes up with new ideas to increase production and
thereby boost revenue. Also, the company has launched a number of
programs involving the upgrade of existing jets along with the
introduction of new advanced jets.
However, the highly competitive industry is forcing Embraer to
incur high costs. The company presently retains a short-term
Zacks Rank #3 (Hold).
BOEING CO (BA): Free Stock Analysis Report
EMBRAER AIR-ADR (ERJ): Free Stock Analysis
GENL DYNAMICS (GD): Free Stock Analysis
LOCKHEED MARTIN (LMT): Free Stock Analysis
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