Embraer Shares Popped: What You Need to Know

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Brazilian aircraft company Embraer (NYS: ERJ) flew 11% in intraday trading today after reporting much better-than-expected earnings and raising guidance.

So what: Second-quarter EPS of $0.53 increased 36% year over year and trounced the $0.45 consensus estimate. Revenue of $1.36 million was flat with the year-earlier quarter but 5% ahead of the consensus forecast.

Now what: Management said the earnings increase resulted from a product-mix shift and improving productivity and efficiency. The press release stated, "[W]e believe Embraer is on track to meet its 2011 projected deliveries and Revenue guidance." The company raised its 2011 revenue forecast to $5.8 billion from $5.6 billion and its EBIT forecast to $465 million from $420 million, inspiring confidence that it is holding its own as competitors Boeing (NYS: BA) , Airbus, and Bombardier target its core regional jet market to compensate for declining demand for larger aircraft.

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At the time thisarticle was published Fool contributor Cindy Johnson owns no shares of any company named above. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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