Embraer Profit Down As Deliveries Drop
Embraer reported a first quarter net profit drop of almost 60 percent as aircraft deliveries fell by a quarter.
Revenue was down 21.6 percent to USD$1.03 billion in what is seasonally a quiet period for deliveries. Operating costs were down 16.8 percent at $871.8 million, giving a $154.5 million gross profit. Net income came in at $44.4 million, a 58.1 percent drop from 1Q16’s $106 million profit.
The main cause of the lower profit was the drop in deliveries, with three fewer commercial aircraft and executive deliveries down by eight. The Brazilian plane maker delivered 18 commercial and 15 executive jets in total during the quarter, down from 21 and 23 respectively in the same period of 2016.
Embraer’s largest division, commercial aviation, reported a 10.5 percent drop in net revenue to $636.4 million, but it was the executive jet segment which saw the biggest revenue fall, down from $401.8 million in 1Q16 to $226 million this year.
The company’s total firm order backlog was down $400 million, to end the quarter at $19.2 billion. Outstanding orders for the E170/E175 series stood at 91, for the E190/E195 66 orders, and for the new E2 series jets at 275.
Embraer said E2 development remains “on time, on specification and on budget.” Widerøe is the launch customer for the E190-E2, and Azul for the E195-E2.
Looking forward, Embraer said it “remains confident in its 2017 guidance for 97 to 102 total commercial jet deliveries and 105 to 125 total executive jet deliveries.”