DBEA55AED16C0C92252A6554BC1553B2 Clicky DBEA55AED16C0C92252A6554BC1553B2 Clicky
June 14, 2024

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Embraer reported strong first quarter 2024 financial results, and reiterated its guidance for the full year. First quarter revenues rose year over year from $716.7 million in 2023 to $896.6 in 2024 on higher aircraft deliveries of 25 aircraft versus 15 in the quarter last year. Adjusted EBITDA rose from $10.3 million last year to $47.1 million this year, and the adjusted net loss narrowed from ($88.9) million in 2023 to ($12.8) million for the quarter.

The company delivered 25 jets in the first quarter, including 11 light and 7 medium executive jets, and 3 E1 and 4 E2 commercial jets. The company’s backlog reached the highest level over the past 7 years growing 13% to $21.1 billion. The company expects full year deliveries between 125-135 business jets and 72-80 commercial jets, for a total between 197-215 aircraft. This reiterates Embraer’s prior guidance for full year delivery performance.

Full year guidance includes revenues between $6.0-$6.4 billion, adjusted EBIT margins between 6.5% and 7.5%, and adjusted free cash flow of $220 million or higher.

Eve, the urban air mobility unit, now has 90% of suppliers selected, and the first airframe for the prototype completed. Eve is expected to burn between $130-$170 million in FCF in 2024.

On the defense side, the KC390 expects 4 deliveries this year, and the company believes that important contracts could be signed this year. Discussions with partner Mahindra are on-going for a potential Indian Air Force contract, which will be decided later this year. Also, Saab and Embraer are jointly marketing the Grippen and KC-390 in appropriate situations.

The Boeing arbitration is likely to be completed during the second quarter. While some supply chain issues remain with late deliveries, the impact is not strong enough to impact full year guidance.

The Bottom Line:
Embraer has recovered well from the Boeing merger breakup and the global pandemic, and is now profitable. While the commercial sector faces strong competition from Airbus, Embraer’s aircraft remain profitable even with aggressive Airbus pricing, which bodes well for the company’s future. The story from Brazil is positive.

author avatar
Ernest Arvai
President AirInsight Group LLC

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