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Shares of Embraer S.A. ERJ have improved 4.3% following the company’s second-quarter 2022 results, reflecting investors’ optimism about the outcome.
Embraer reportedsecond-quarter 2022 adjusted earnings of 21 cents per American Depository Share (“ADS”), beating the Zacks Consensus Estimate of a loss of 5 cents per ADS. However, the bottom line declined 13% from 23 cents per ADS reported in the prior-year quarter.
Total Revenues
Embraer’s second-quarter revenues were $1,018.9 million, down 9.9% year over year.
EmbraerEmpresa Brasileira de Aeronautica Price, Consensus and EPS Surprise
EmbraerEmpresa Brasileira de Aeronautica price-consensus-eps-surprise-chart | EmbraerEmpresa Brasileira de Aeronautica Quote
Order & Delivery
Embraer delivered 32 jets in the reported quarter. ERJ delivered 11 commercial and 21 executive (12 light and nine large) jets compared with six commercial and eight executive (six light and two midsize) jets in the prior quarter.
The backlog at the end of the second quarter was $17.8 billion, representing an increase of 12% year over year, driven by solid order activity.
Operational Highlights
Embraer’s adjusted EBIT was $81.2 million in the second quarter of 2022 compared with the $104.7 million reported in the second quarter of 2021.
The company posted quarterly adjusted EBITDA of $124.6 million, declining 28.9% from the year-earlier quarter.
Financial Update
As of Jun 30, 2022, ERJ’s cash and cash equivalents amounted to $1.04 billion compared with $1.82 billion as of Dec 31, 2021.
The company had net debt of $1,197.9 million as of Jun 30, 2022, down from $1,392.2 million as of Dec 31, 2021.
Its adjusted free cash outflow in the second quarter was $91.2 million, improving massively from free cash flow of $45.1 million in the year-ago period. The improvement came primarily due to working capital optimization measures.
Guidance
Embraer reaffirmed its guidance for 2022. Its commercial jet deliveries are projected in the band of 60-70 jets, while the Executive Aviation deliveries are expected in the band of 100-110 aircraft.
The company expects to generate revenues in the range of $4.5 billion-$5 billion in 2022. The Zacks Consensus Estimate for sales, pegged at $4.74 billion, is on par with the midpoint of the guidance range.
Embraer anticipates the adjusted EBIT margin in the range of 3.5%-4.5% and the adjusted EBITDA margin in the band of 8%-9% in 2022. It anticipates free cash flow without mergers and acquisitions or divestitures of $50 million or more.
Zacks Rank
Embraer currently has a Zacks Rank #2 (Buy). You can seethe complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.