The Brazilian jet maker
) reported solid delivery figures for second-quarter 2014. The
company has delivered a total of 58 jets, up 70.6% sequentially and
13.7% year over year.
The commercial aviation and the business aviation markets were
delivered 29 jets each. Under the commercial aviation, Embraer
provided 16 of E-175s, 8 E-190s and 5 E-195s while the rest were
delivered to business aviation inclusive of 22 Light and 7 Large
The outperformance was primarily driven by 100% sequential surge in
both E-175 and E-190 aircraft deliveries. In addition, strong
contributions from the E-195 and Light as well as Large jets also
acted as catalysts for growth in delivery. During the second
quarter, Embraer has made first deliveries for its E-175 aircraft
with the upgrade of aerodynamic. The company delivered improvised
E-175 aircraft to several U.S. companies, including Republic
Airways, SkyWest and United Airlines.
As on Jun 30, 2014, Embraer had a firm order backlog of $18.1
billion. In terms of aircraft breakdown, the company's order
backlog comprises 167 E-175s, 100 E-175-E2s, 62 E-190s, 50
E-195-E2s, 50 E-190-E2s and 11 E-195s jet.
Under the second quarter backlog, Embraer's significant contracts
include delivery of 60 E-175s to the American Airlines and 100
E-175-E2s to Skywest. Higher aircraft demand from the U.S. firms
primarily boosted the company's current backlog.
Meanwhile, Embraer announced that it has won a contract from Trans
States Holdings to deliver 50 E175-E2 aircraft. The agreement has
options for an additional 50 units, taking the total order
potential to 100 aircraft. The deal is valued at around $2.4
billion at list prices, subject to certain conditions.
Embraer has already launched the second generation of its E-Jets
family of commercial aircraft, E2, including three new aircraft
E175-E2, E190-E2 and E195-E2. The second generation of E-Jets would
improve fuel burn and reduce maintenance costs in the double
digits. Indeed, E-Jets E2 burn at least 16% less fuel per seat with
E-195 specifically burning 23% less fuel. In addition, the E2
category jet has higher number of seats. These positive factors are
expected to help Embraer to gain more orders in the future.
Embraer is the world's third largest commercial aircraft
The Boeing Co.
) and Airbus. The company designs, manufactures and sells aircraft
and systems under both commercial as well as executive aviation,
and defense and security segments.
Embraer currently has a Zacks Rank #2 (Buy). Other stocks in the
same industry looking equally good include
Huntington Ingalls Industries, Inc.
Leidos Holdings, Inc.
). Both the stocks carry a Zacks Rank #2 (Buy).
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EMBRAER AIR-ADR (ERJ): Free Stock Analysis
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