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Embraer (ERJ) Q4 Earnings Beat Estimates, Revenues Fall Y/Y

·4 min read

Embraer SA ERJ incurred fourth-quarter 2020 adjusted loss of 7 cents per American Depository Share (ADS), which came in much narrower than the Zacks Consensus Estimate of a loss of 28 cents. The bottom-line figure also improved from the year-ago quarter’s adjusted loss of 51 cents.

Including one-time items, the company incurred a GAAP loss of 2 cents per share compared with a loss of $1.14 in the year-ago quarter.

For 2020, the company reported adjusted loss of $2.52 per share, reflecting deterioration from loss of $1.18 at 2019-end.

EmbraerEmpresa Brasileira de Aeronautica Price, Consensus and EPS Surprise

EmbraerEmpresa Brasileira de Aeronautica Price, Consensus and EPS Surprise
EmbraerEmpresa Brasileira de Aeronautica Price, Consensus and EPS Surprise

EmbraerEmpresa Brasileira de Aeronautica price-consensus-eps-surprise-chart | EmbraerEmpresa Brasileira de Aeronautica Quote

Revenues

Embraer’s fourth-quarter revenues came in at $1,841.4 million, down 11.7% year over year. The decline was due to lower revenues in each of the company’s segments, except for Defense & Security.

For 2020, the company generated revenues worth $3,771.1 million, which declined 31% from 2019. The deterioration in full-year revenues can be attributed to pandemic-driven declines in commercial and executive jet deliveries as well as lower services & support activity stemming from reduced commercial and executive aircraft traffic in 2020.

Order and Delivery

Embraer delivered a total of 71 jets in the reported quarter, down 12.3% year over year. The company delivered 28 commercial and 43 executive (23 light and 20 large) jets during the third quarter compared with 35 commercial and 46 executive (20 light and 26 large) jets in fourth-quarter 2019.

Embraer’s backlog at the end of the fourth quarter was $14.4 billion, down from $15.1 billion sequentially as well as from $16.8 billion a year ago.

Operational Highlights

In the fourth quarter, the company’s cost of sales and services totaled $1,619 million, down from $1,806.4 million in the prior-year quarter.

However, Embraer’s gross profit slumped 20.2% year over year to $222.4 million.

Segment Result

Segment-wise, revenues in the Commercial Aviation segment were $689.4 million, which declined 24.7% on a year-over-year basis due to lower deliveries in the current quarter.

Revenues at the Executive Jets segment were $580 million, down 6.4% year over year.

Revenues at the Defense & Security segment were $311.1 million, up 68.1% from the figure reported in the fourth quarter of 2019, led by growth in revenues related to Super Tucano deliveries.

Revenues at the Services & Support segment were $253.5 million, which plunged 29.6% year over year.

Financial Update

As of Dec 31, 2020, the company’s cash and cash equivalents amounted to $1,883.1 million compared with $2,307.7 million as of Dec 31, 2019.

Embraer had net debt of $1,695.7 million as of Dec 31, 2020, up from $612.4 million as of Dec 31, 2019.

Adjusted net cash used in operating activities was $1,290.2 million at the end of 2020 against net cash generated worth $893.8 million at the end of 2019.

Guidance

Due to the uncertainty related to COVID-19 and its impact on the industry, Embraer has decided to not publish 2021 financial and delivery guidance at this point.

Zacks Rank

Embraer currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other Defense Releases

Lockheed Martin Corp. LMT reported fourth-quarter 2020 earnings from continuing operations of $6.38 per share, in line with the Zacks Consensus Estimate.

Hexcel Corporation HXL reported fourth-quarter 2020 loss of 18 cents per share, in line with the Zacks Consensus Estimate.

General Dynamics Corporation GD reported fourth-quarter 2020 earnings from continuing operations of $3.49 per share, which missed the Zacks Consensus Estimate of $3.55 by 1.7%.

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EmbraerEmpresa Brasileira de Aeronautica (ERJ) : Free Stock Analysis Report

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