Embraer Stock Price, News & Analysis

Embraer has announced the sale of up to six A-29 Super Tucano aircraft to the Uruguayan Air Force (FAU). The contract includes one aircraft with a commitment to acquire five additional units, along with mission equipment, integrated logistics services, and a flight simulator. Deliveries are scheduled from 2025. This makes Uruguay the sixth nation in South America to operate the A-29 Super Tucano, joining Brazil, Chile, Colombia, Ecuador, and Paraguay.

The A-29 Super Tucano is a versatile aircraft used for border monitoring, reconnaissance, advanced training, and controlling illegal activities. It has proven its effectiveness in various South American environments, from the Amazon rainforest to mountainous regions. With over 260 orders and 570,000 flight hours, including 60,000 in combat, the A-29 Super Tucano is the global leader in its category.

Virgin Australia has placed a firm order with Embraer for eight E190-E2 aircraft, set to be delivered from the second half of 2025. The E190-E2, known for its fuel efficiency and low noise emissions, will be based in Perth and operated by Virgin Australia Regional Airlines (VARA). This order marks a significant step in Virgin Australia's fleet renewal plan, replacing its aging Fokker fleet.

The E190-E2 boasts a 30% reduction in emissions compared to the outgoing F100 and features Pratt & Whitney's PW1900G engines. It's certified to fly with up to 50% sustainable aviation fuel (SAF) blends. This acquisition aligns with Embraer's commitment to achieving net zero emissions by 2050 and carbon neutrality by 2040.

Embraer (NYSE: ERJ; B3: EMBR3) reported its second-quarter results for 2024. Key highlights include the delivery of 47 jets, marking an 88% increase from 1Q24. Deliveries comprised 27 executive jets, 19 commercial jets, and 1 multi-mission C-390 Millennium. The firm order backlog reached $21.1 billion, a 7-year high, up over 20% annually.

Revenues totaled $1.494 billion, up 67% qoq, with commercial aviation revenues rising by 176%. Adjusted EBIT was $138.8 million with a 9.3% margin, improving from $6.8 million (0.8%) in 1Q24. However, adjusted free cash flow was negative at $(215) million due to working capital needs.

The company reiterated its 2024 guidance, expecting commercial aviation deliveries of 72-80 aircraft and executive aviation deliveries of 125-135. Total revenues are forecasted between $6.0-6.4 billion with an adjusted EBIT margin of 6.5%-7.5%, and adjusted free cash flow of $220 million or higher.

Embraer has released its Market Outlook 2024, forecasting demand for 10,500 new sub-150-seat jets and turboprops through 2043, valued at USD 640 billion. The report highlights the increasing relevance of small narrowbody aircraft in complementing larger jets for medium and lower-density markets. North America is expected to lead jet deliveries, followed by Asia Pacific and Europe.

Key points include:

• Global passenger traffic (RPKs) forecast to grow 4% annually through 2043
• 8,470 jet and 2,030 turboprop deliveries expected
• Asia Pacific projected to have the highest RPK growth rate at 5.0%
• Emphasis on mixed fleets of small and large narrowbodies for optimal network service
• New opportunities identified for small-narrowbody freighters in e-commerce growth

Embraer (B3: EMBR3, NYSE: ERJ) announced the sale of six A-29 Super Tucano aircraft to the Paraguayan Air Force (FAP) at the Farnborough International Airshow. The multi-mission aircraft will be delivered starting in 2025, including mission equipment and integrated logistics services. The A-29 Super Tucano is the global leader in its category, with over 260 orders and 550,000 flight hours. It offers versatility for armed reconnaissance, close air support, light attack, and advanced training missions on a single platform. The aircraft is known for its cost-effectiveness, accessibility, and operational flexibility, making it an attractive choice for air forces worldwide.

The Dutch Ministry of Defense has signed a contract to acquire nine Embraer C-390 Millennium aircraft in a joint purchase with Austria. The Netherlands will receive five aircraft, while Austria will get four. This acquisition is part of the 'Replacement of Tactical Airlift Capacity' project, aimed at enhancing both countries' ability to rapidly deploy or evacuate equipment and personnel worldwide. The C-390 Millennium offers improved operational capacity with better performance, greater reliability, and higher transport capacity.

The joint purchase will allow both nations to benefit from synergies in training, logistics, and future platform growth. The aircraft has proven its capabilities with the Brazilian and Portuguese Air Forces, accumulating over 13,000 flight hours with a 93% mission capable rate and over 99% mission completion rate. The C-390 can carry 26 tons of payload, fly at 470 knots, and perform various missions including cargo and troop transport, medical evacuation, and humanitarian missions.

Embraer (NYSE: ERJ) reported strong performance in Q2 2024, with total deliveries increasing 88% quarter-on-quarter to 47 jets. The company's backlog reached a 7-year high of $21.1 billion, up more than 20% year-over-year. Commercial Aviation led growth with a 170% increase in deliveries compared to Q1. Executive Jets also showed solid performance, delivering 27 aircraft.

Key highlights include:

• Commercial Aviation backlog of $11.3 billion, boosted by a 20 E2 jet order from Mexicana de Aviación
• Delivery of the 1,800th E-Jet
• Executive Jets maintaining a positive book-to-bill ratio
• Delivery of the 2nd C-390 Millennium to the Portuguese Air Force

Embraer's 2024 guidance remains at 197-215 total deliveries across all segments.

Mexicana de Aviación has placed an order for 20 Embraer E2 aircraft, split evenly between 10 E190-E2 and 10 E195-E2 jets. Deliveries are scheduled to start in the second quarter of 2025. These jets will feature single-class layouts with 108 and 132 seats, respectively. This move marks Mexicana as the first E2 operator in Mexico, enhancing its fleet for better domestic and international connectivity, while highlighting the commitment to sustainability due to the aircraft's low operating costs and fuel efficiency. The airline has seen rapid growth since its re-launch in December 2023, already serving 18 destinations and transporting over 115,000 passengers.

Embraer S.A. released its first Quarter 2024 Earnings Results, reiterating 2024 guidance with Commercial Aviation deliveries between 72-80 aircraft, Executive Aviation deliveries between 125-135, total company revenues in the US$6.0-6.4 billion range, Adjusted EBIT margin between 6.5%-7.5%, and Adjusted free cash flow of US$220 million or higher. The firm order backlog reached US$21.1 billion, representing the highest level in 7 years. Revenues increased by +25% yoy, with Executive Aviation showing 2.75x growth. Adjusted EBIT margin improved to +0.8% in 1Q24. However, Adjusted free cash flow w/o Eve was negative US$(346) million due to preparation for higher deliveries in the future. Liability management reduced gross debt by US$276 million.