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Embraer shares edge up on earnings beat, optimistic guidance

Published 18/03/2024, 13:36
© Reuters.
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SÃO PAULO - Embraer S.A. (NYSE: ERJ; B3: EMBR3) reported a robust fourth quarter for 2023, surpassing analyst expectations with an earnings per share (EPS) of $1.05, notably higher than the consensus estimate of $0.62.

The company's revenue for the quarter also met the analyst projections, coming in at $1.98 billion. The positive earnings news and forward-looking guidance provided by the aerospace manufacturer nudged its shares up by 0.43% in premarket trading.

The company's financial performance was bolstered by a 13% increase in jet deliveries compared to the previous year, with a total of 181 jets delivered in 2023. Despite supply chain challenges impacting the results, Embraer's firm order backlog concluded the fourth quarter at a six-year high of $18.7 billion. Revenue for the fiscal year 2023 reached $5.269 billion, marking a 16% rise from 2022, with the Defense unit showing a notable 25% growth, closely followed by Commercial Aviation's 20%.

Looking ahead, Embraer provided an optimistic outlook for fiscal year 2024, forecasting revenues between $6.0 and $6.4 billion, which edges above the analyst consensus of $6.21 billion. The company anticipates commercial aviation deliveries to range between 72 and 80 aircraft, and executive aviation deliveries to be between 125 and 135 aircraft. Embraer's guidance also includes an adjusted EBIT margin between 6.5% and 7.5%, and a minimum adjusted free cash flow of $220 million for the year.

Embraer's CEO commented on the results, highlighting the company's resilience in the face of supply chain delays and expressing confidence in the future, "Our team's dedication has led to a strong quarter, and with our highest backlog in six years, we look forward to continued growth and efficiency improvements in 2024."

The company's financial stability was further acknowledged by credit rating agencies, with S&P Global Ratings elevating Embraer to investment grade and Moody's (NYSE:MCO) upgrading to Ba1, just one notch below investment grade. Fitch also revised the company's outlook to positive, maintaining a BB+ rating.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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