) has entered into an agreement with Irish aircraft lessor, Aldus
Aviation Limited, to sell 20 E-Jets, 5 EMBRAER 175 jets and 15
EMBRAER 190 jets. The contract also entitles Aldus to buy 15
models from the E-Jet family in the future.
The total contract value, expected to reach $1.56 billion, was
already included in the fourth quarter 2012 backlog of Embraer,
standing at $12.5 billion. The deal is expected to help Embraer
set up its business in new areas along with increasing client
base in Europe, Middle East, Australasia and Central and South
America through Aldus.
In a separate press release, the company announced that it has
been chosen by the Brazilian Air Force (FAB) for the renovation
of its surveillance aircraft, nicknamed E-99. The contract,
estimated at $215 million, will be executed through an Embraer
Defense and Security subsidiary, Atech. The contract also
includes the training and improvement of crews through setting up
of six mission planning and analysis stations.
Both the deals are expected to strengthen Embraer's position
globally. The company currently operates in more than 43
countries through 63 airlines. The E-Jet models of the company
are exploited in a number of ways like network carriers, low cost
and regional airlines as well as charter operators.
In spite of the contract wins, the stock currently has a Zacks
Underperform recommendation on the stock. It is also apprehended
that the company's earnings will miss the Zacks Consensus
Estimate of 82 cents per share, with the Earnings ESP standing at
-9.76%. Embraer bears a Zacks Rank #5 (Strong Sell). The
company's major competitor
Erickson Air Crane
) holds a Zacks Rank #1 (Strong Buy).
ERICKSON AIR-CR (EAC): Free Stock Analysis
EMBRAER AIR-ADR (ERJ): Free Stock Analysis
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