) second-quarter 2014 earnings of 70 cents per American Depository
Shares (ADS) spiked 40% from 50 cents per ADS in the prior-year
quarter. The reported figure also beat the Zacks Consensus Estimate
of 63 cents by 11.1%.
The better-than-expected results were attributable to strong
defense and executive jet deliveries.
Net revenue was $1,761.3 million, up 13.1% from $1,557 million in
the year-ago quarter and ahead of the Zacks Consensus Estimate of
$1,655 million by 6.4%. The upside was driven by strong performance
from both the Defense & Security as well as Commercial
Executive Jets segments. In addition, the company's efforts to
diversify its business beyond its commercial dealings boosted the
Order and Delivery
In the second quarter of 2014, the jet manufacturer delivered a
total of 58 jets, up 70.6% sequentially and 13.7% year over year.
Of the total deliveries, 29 jets were delivered to the commercial
aviation market including 16 E-175s, 8 E-190s and 5 E-195s. The
remaining 29 jets, inclusive of 22 light and 7 large ones, were
delivered to the executive aviation market.
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 comprised 167 E-175s, 100 E-175-E2s, 62 E-190s, 50
E-195-E2s, 50 E-190-E2s and 11 E-195s.
Commercial Aviation revenues, comprising 55.2% of total quarterly
revenues, increased 13% year over year to $971.9 million.
Executive Jets revenues, representing 23.9% of total quarterly
revenues, surged 13.8% year over year to $420.6 million.
Defense & Security generated revenues of $357.0 million that
accounted for 20.3% of total second quarter sales and increased
15.5% from the year-ago period.
The Other category accounted for 0.6% of total second quarter
revenues, declining almost 31% year over year to $11.8 million.
Cash and cash equivalents were $1,383.1 million as of Jun 30, 2014,
compared with $1,683.7 million as of Dec 31, 2013.
As of Jun 30, 2014, the company's total debt was $2,412.5 million,
up from $2,224.2 million as of Dec 31, 2013.
In the second quarter 2014, Embraer's net cash from operating
activities was $140.1 million versus $412.6 million in second
Capital expenditure was $60.3 million, down from $124.8 million in
the second quarter 2013.
In its guidance issued earlier in February, Embraer projected 2014
total revenues 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
The company expected EBIT margin in the range of 9.0%−9.5% for
In addition, the company has also maintained its prior investment
guidance of around $0.7 billion for 2014. This comprises $0.08
billion of research, $0.3 billion of product development and $0.2
billion of capital expenditure.
Pentagon's prime contractor, Lockheed Martin Corp. (
) posted impressive second quarter 2014 earnings before the opening
bell in spite of the uncertain budget environment. The company
reported quarterly earnings of $2.76 per share, comfortably
surpassing the Zacks Consensus Estimate of $2.66 by 3.8%.
Another defense major, Northrop Grumman Corp. (
) reported second-quarter 2014 adjusted earnings of $2.04 per
share, lagging the Zacks Consensus Estimate of $2.20 by 7.3%.
However, earnings were 3.6% higher year over year.
Aerospace giant The Boeing Company (
) delivered upbeat second quarter 2014 results backed by robust
deliveries. The company reported adjusted second quarter 2014
earnings of $2.42 per share, beating the Zacks Consensus Estimate
by 19.8%. The quarterly number rose an impressive 44.9% from $1.67
per share a year ago.
Embraer currently has a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research?
Today, you can download 7 Best Stocks for the Next 30 Days.
Click to get this free report
NORTHROP GRUMMN (NOC): Free Stock Analysis
EMBRAER AIR-ADR (ERJ): Free Stock Analysis
BOEING CO (BA): Free Stock Analysis Report
LOCKHEED MARTIN (LMT): Free Stock Analysis
To read this article on Zacks.com click here.