Embraer (ERJ), the Brazilian aerospace manufacturer, early Friday narrowed its full-year commercial jet delivery expectations while keeping its 2024 revenue views intact as it reported third-quarter results. The company, which trades in American depositary receipts (ADRs), surged in early market trade.
The commercial, business and defense jet manufacturer saw Q3 revenue grow 32% to $1.69 billion, with sales from its "executive aviation" and "defense & security" segments each increasing 65% compared to a year ago. Embraer also reported adjusted earnings per ADS share of $1.20, compared to 18 cents per ADS share a year ago. Analysts expected revenue totaling $1.58 billion and earnings of 25 cents per share.
Embraer produces a fleet of commercial, business and defense jets. On the commercial front, Embraer is best-known for its Embraer 175 (E175) single-aisle planes. It also manufacturers the C-390 military transport aircraft. The company's Phenom 300 has been the world's bestselling light jet for the past 12 years, according to a May announcement.
↑ XEmbraer delivered 59 aircraft in Q3, up 37% vs. the 43 in Q3 2023. Executive jets totaled 41, there were 16 commercial jets and 2 multi-mission C-390 aircraft. The company said Friday its backlog at the end of Q3 is worth $22.7 billion, marking a nine-year high level and more than 25% higher compared to a year ago.
However, Embraer also announced Friday that its "prior guidance no longer represents evenly balanced opportunities and risks for full-year operations."
The jet manufacturer forecasts 2024 commercial aviation deliveries between 70-73 aircraft, down from 72-80. Embraer on Friday maintained its executive aviation deliveries view of 125-135. The Brazil-based outfit also kept its 2024 revenue expectation of $6 billion-$6.4 billion steady. Analysts peg Embraer full-year revenue at $6.3 billion, up from $5.27 billion in 2023, according to FactSet.
ERJ gained 6.6% to 37.48 during market trade on Friday, breaking out above a traditional 37.30 buy point from a flat base, according to MarketSurge analysis. Aggressive investors could use a short-term high of 35.59 as an early entry.
The aircraft maker has rallied 90% so far this year. Meanwhile, the 40 stocks in the IBD-tracked Aerospace/Defense industry group have collectively advanced about 25% in 2024.
Embraer suffered four straight years of net losses from 2018 to 2021 before reviving its earnings growth in 2022 and 2023.
Embraer also founded Eve Air Mobility (EVEX) as a spinout of its Embraer-X incubator in 2017. Eve Air Mobility is an independent company that produces electric vertical takeoff and landing (eVTOL) aircraft for urban environments.
Embraer stock has a 94 Composite Rating out of a best-possible 99. ERJ shares also have a 94 Relative Strength Rating and a 70 EPS Rating.
Please follow Kit Norton on X @KitNorton for more coverage.
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