U.S. Markets closed

Embraer (ERJ) Reports Adjusted Loss in Q2, Revenues Up Y/Y

Zacks Equity Research

Embraer SA ERJ incurred adjusted loss of 8 cents per share in second-quarter 2019.

Barring one-time items, the company reported GAAP earnings of 4 cents per share against a loss of 72 cents incurred in the prior-year period.

Revenues

Embraer’s second-quarter revenues came in at $1,378.7 million, which surpassed the Zacks Consensus Estimate of $1,350 million by 2.1%. Revenues also increased 10%, year over year, primarily backed by higher deliveries in the Executive Jets segment, boosting the top line by 43.3%.

Order and Delivery

Embraer delivered a total of 51 jets in the reported quarter, up 6.25% year over year. The company delivered 26 commercial and 25 executive (19 light and 6 large) jets during the second quarter compared with 28 commercial and 20 executive (15 light and 5 large) jets in the second quarter of 2018.

Embraer’s backlog at the end of the quarter was $16.9 billion, down from $17.4 billion in the year-ago quarter.

Operational Highlights

In the second quarter, the company’s cost of sales and services totaled $1,180.1 million, up from $1,116.2 million in the prior-year quarter.

Also, Embraer’s gross profit grew 44.2% to $198.6 million.

It posted quarterly adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $67 million compared with $41.5 million in the year-earlier quarter.

Embraer-Empresa Brasileira de Aeronautica Price, Consensus and EPS Surprise

Embraer-Empresa Brasileira de Aeronautica Price, Consensus and EPS Surprise

Embraer-Empresa Brasileira de Aeronautica price-consensus-eps-surprise-chart | Embraer-Empresa Brasileira de Aeronautica Quote

Financial Update

As of Jun 30, 2019, the company’s cash and cash equivalents amounted to $855.5 million compared with $1,280.9 million as of Dec 31, 2018.

Embraer had net debt of $1,090.3 million as of Jun 30, 2019, up from $439.9 million as of Dec 31, 2018.

Adjusted net cash generated by operating activities summed $140.5 million compared with cash inflow of $129.3 million in the year-ago period.

The company’s adjusted free cash flow for the second quarter was $1.5 million compared with free cash flow of $43.3 million at the end of the year-ago period. Higher CapEx and investments in development chiefly resulted in this downside.

Guidance

For 2019, the company reaffirmed its guidance. Embraer still expects to deliver 85-95 commercial jets to the Commercial Aviation segment along with 90-110 executive jets.

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.

Recent Defense Releases

Textron Inc. TXT reported second-quarter 2019 earnings from continuing operations of 93 cents per share, which surpassed the Zacks Consensus Estimate of 85 cents by 9.4%. The bottom line also increased 6.9% from 87 cents in the year-ago quarter.

Lockheed Martin Corp. LMT reported second-quarter 2019 earnings of $5 per share, which surpassed the Zacks Consensus Estimate of $4.74 by 5.5%. The bottom line also improved 23.5% from $4.05 in the year-ago quarter.

Kratos Defense & Security Solutions, Inc. KTOS reported second-quarter 2019 earnings of 8 cents per share, which surpassed the Zacks Consensus Estimate of 7 cents by 14.3%. The bottom line also improved from the prior-year quarter’s earnings of 2 cents per share.

The Hottest Tech Mega-Trend of All

Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.

See Zacks' 3 Best Stocks to Play This Trend >>


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
 
Embraer-Empresa Brasileira de Aeronautica (ERJ) : Free Stock Analysis Report
 
Lockheed Martin Corporation (LMT) : Free Stock Analysis Report
 
Kratos Defense & Security Solutions, Inc. (KTOS) : Free Stock Analysis Report
 
Textron Inc. (TXT) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research