) first-quarter 2014 earnings of 34 cents per American Depository
Shares (ADS) spiked 78.9% from 19 cents per ADS in the prior-year
quarter. The reported figure also beat the Zacks Consensus
Estimate of 22 cents by 54.5%.
The better-than- expected result was attributable to the strong
defense and executive jet deliveries.
Net revenue was $1,242.3 million, up 14.4% from $1,085.9
million in the year-ago quarter and ahead of the Zacks Consensus
Estimate of $1,144.0 million by 8.6%. The improved result was
driven by strong outcome from both the Defense & Security and
Executive Jets segments. In addition, the company's continuous
effort to diversify its business beyond its commercial dealings
also boosted the top line.
Order and Delivery
In first quarter 2014, the plane manufacturer delivered a
total of 34 jets, higher than 20 deliveries made in the
Of the total deliveries, 14 jets were made for the commercial
aviation market including 8 E-175, 4 E-190, 1 E-195 and 1 E-170.
The remaining 20 jets, inclusive of 17 light and 3 large ones
were delivered to the executive aviation market.
Embraer's firm order backlog totaled $19.2 billion, reflecting
a quarter-over-quarter increase of 5.5% and year-over-year
increase of 44.4%. Embraer's order backlog comprised 180 E-175,
100 E-175-E2, 68 E-190, 50 E-195-E2, 50 E-190-E2 and 16
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Commercial Aviation revenues, comprising 44.7% of total quarterly
revenue, fell 13.2% year over year to $555.3 million.
Executive Jets revenues, representing 21.5% of total quarterly
revenue, surged 52.5% year over year to $267.4 million.
Defense & Security generated revenues of $394.3 million that
accounted for 31.8% of total first quarter sales and increased
56.7% from the year-ago period.
The Other category accounted for 2.0% of total first quarter
revenue, rising almost 31.1% year over year to $25.3 million.
Cash and cash equivalents were $1,259.5 million as of Mar 31,
2014, compared with $1,683.7 million as of Dec 31, 2013.
As of Mar 31, 2013, the company's total debt was $2,217.8
million, up from $2,194.3 million as of Dec 31, 2013.
In the first quarter 2014, Embraer's net cash used in operating
activities was $300.4 million versus $369.7 million in first
Capital expenditure was $47.6 million, down from $50.4 million in
the first quarter 2013.
In its previous guidance, Embraer projected 2014 total revenue in
the range of $6.0 billion to $6.5 billion. Embraer expects 2014
revenues to increase slightly from 2013 levels on the back of its
Defense & Security and Executive Jets segments.
In its earlier guidance the company expected EBIT margin in the
range of 9.0%−9.5% for 2014.
In addition, the company has also maintained its prior investment
guidance of around $0.7 billion for 2014. This expenditure
comprises $0.08 billion of research, $0.3 billion of product
development and $0.2 billion of capital expenditure.
Lockheed Martin Corp.
) announced first quarter 2014 earnings of $2.87 per share,
surpassing the Zacks Consensus Estimate of $2.52 by 13.9%.
) reported first quarter 2014 adjusted earnings of $1.76 per
share, beating the Zacks Consensus Estimate of $1.54 by 14.3%.
Another defense major,
General Dynamics Corp.
) reported first quarter 2014 earnings of $1.71 per share,
surpassing the Zacks Consensus Estimate by 4.9%.
In the first quarter 2014, the company's firm order backlog
reached its highest level since the second quarter of 2009,
mainly due to orders in the Commercial Aviation segment. We
expect this will help the company to generate considerable amount
of revenue in the future.