Embraer Q3 earnings beat estimates while revenues fall short

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Embraer Q3 earnings beat estimates while revenues fall short
Credit: © Reuters.

Embraer S.A. reported a stronger-than-expected adjusted income for Q3 2023 on Tuesday, surpassing the consensus estimate by 28.6%. However, the company's revenues fell short of expectations, even as they increased by 38.3% year-over-year to reach $1,284.4 million.

In the third quarter, the company delivered 43 jets, including 15 commercial and 28 executive jets. This marked a slight decrease from the previous quarter, which saw the delivery of 17 commercial and 30 executive jets. At the end of Q3, Embraer's backlog stood at $17.8 billion.

The company's adjusted operating income amounted to $100.1 million for the quarter, and its adjusted EBITDA was $149.3 million, indicating a rise of 37.8%. However, Embraer's cash and cash equivalents decreased to $1,030.5 million from $1,816.9 million at the end of 2022. Consequently, its net debt rose to $1,112.3 million.

During the same period, other companies such as Hexcel (NYSE: HXL ) Corporation, Lockheed Martin Corporation (NYSE: LMT ), and Kratos Defense (NASDAQ: KTOS ) & Security Solutions reported Q3 adjusted earnings of 38 cents per share, $6.77 per share, and 12 cents per share respectively.

Embraer witnessed a free cash outflow of $44 million in Q3 but reaffirmed its guidance for 2023. The company projects commercial jet deliveries between 65-70 jets and Executive Aviation deliveries between 120-130 aircraft for the year ahead. It also anticipates revenues in the range of $5.2-$5.7 billion with an adjusted EBIT margin of 6.4%-7.4% and an adjusted EBITDA margin of 10%-11%.

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