Embraer S.A. ERJ reported third-quarter 2024 adjusted earnings of $1.20 per American Depository Share (ADS), which beat the Zacks Consensus Estimate of 28 cents by a massive 328.6%. The bottom line also improved a solid 566.7% from 18 cents reported in the prior-year quarter.

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The company registered quarterly GAAP earnings of 97 cents per ADS compared with 33 cents per ADS in the third quarter of 2023.

Embraer’s Total Revenues

Revenues totaled $1.69 billion, up 31.9% year over year, primarily driven by higher revenues from its Executive Aviation, Defense and Security, Commercial Aviation and Services & Support segments. The figure surpassed the Zacks Consensus Estimate by 4.1%.

ERJ’s Order & Delivery

Embraer delivered 59 jets in the quarter. It delivered 16 commercial and 41 executive (22 light and 19 midsize) jets compared with 15 commercial and 28 executive (19 light and nine midsize) jets in the prior-year quarter.

The backlog at the end of the third quarter was $22.7 billion, in line with the prior-year quarter’s figure.

ERJ’s Segmental Details

Executive Aviation: This segment recorded revenues worth $561.5 million, up 65% year over year, driven by higher aircraft delivery figures and product mix.
 
Defense & Security: This unit generated revenues of $219.6 million, which also improved 65% year over year. The upside was driven by Super Tucano and higher volume of C-390 jets.
 
Commercial Aviation: This segment recorded revenues worth $473.3 million, up 11% year over year. This upside was driven by higher aircraft deliveries.

Services & Support: This segment recorded revenues worth $425.5 million, up 16% year over year, on account of higher fleet utilization and ramp-in Maintenance, Repairs, and Operations services.

Others: This segment includes ERJ’s Agricultural Aviation, cyber division Tempest and other businesses. Revenues for this segment were $12.5 million, down 40% year over year. This downside was due to lower volumes in agriculture and cyber segments and a weaker foreign exchange rate.

Operational Highlights for ERJ

Embraer’s operating income amounted to $285.2 million compared with $84.4 million in the third quarter of 2023.

The company posted adjusted EBITDA of $356.6 million, which increased a solid 138.8% from the year-earlier quarter’s figure.

Financial Update for ERJ

As of Sept. 30, 2024, ERJ’s cash and cash equivalents amounted to $0.83 billion compared with $1.63 billion as of Dec. 31, 2023.

Its adjusted free cash flow (without Eve) totaled $241.1 million compared with $44 million in the prior-year period.

As of Sept. 30, cash outflow from operating activities amounted to $176 million compared with the year-ago period’s figure of $186.2 million.

2024 Guidance

Embraer updated its guidance for 2024. It now expects to deliver 70-73 commercial jets, lower than its prior guided range of 72-80 commercial jets. However, the company continues to expect to deliver Executive Aviation jets in the band of 125-135 this year.
 
ERJ still anticipates to generate revenues in the range of $6.0-$6.4 billion. The Zacks Consensus Estimate for revenues is pegged at $6.28 billion, which lies above the midpoint of the company’s guided range.

Embraer now expects adjusted EBIT margin to be between 9% and 10%, higher than the prior guidance of 6.5- 7.5%. Adjusted free cash flow is now projected to be $300 million or more compared with the previous guidance of $220 million or more.

ERJ’s 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

General Dynamics Corporation GD reported third-quarter earnings per share of $3.35, which missed the Zacks Consensus Estimate of $3.54 by 5.4%. However, the bottom line increased 10.2% from $3.04 per share recorded in the year-ago quarter.

Revenues of $11.67 billion missed the Zacks Consensus Estimate of $11.72 billion by 0.4%. The top line, however, improved 10.4% from the prior-year figure.

RTX Corporation RTX reported third-quarter 2024 adjusted earnings per share of $1.45, which surpassed the Zacks Consensus Estimate of $1.33 by 9%. The bottom line also improved 16% from the year-ago quarter’s level of $1.25.

RTX’s sales totaled $20.09 billion, which surpassed the consensus estimate of $19.91 billion by 0.9%. The top line also surged 49.2% from $13.46 billion recorded in the third quarter of 2023.

Lockheed Martin Corporation LMT reported third-quarter adjusted earnings of $6.84 per share, which beat the Zacks Consensus Estimate of $6.47 by 5.7%. The bottom line also rose 1% from the year-ago quarter's figure of $6.77.

Net sales totaled $17.10 billion, which missed the consensus estimate of $17.28 billion by 1%. The top line, however, increased 1.3% from $16.88 billion reported in the year-ago quarter.

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