Embraer Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

Embraer (NYS: ERJ) reported earnings on April 26. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Embraer missed estimates on revenues and earnings per share.

Compared to the prior-year quarter, revenue improved slightly and GAAP earnings per share dropped significantly.


Margins contracted across the board.

Revenue details
Embraer recorded revenue of $1.09 billion. The eight analysts polled by S&P Capital IQ hoped for revenue of $1.15 billion on the same basis. GAAP reported sales were 7.0% higher than the prior-year quarter's $1.08 billion.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.34. The 11 earnings estimates compiled by S&P Capital IQ averaged $0.42 per share. GAAP EPS of $0.35 for Q1 were 41% lower than the prior-year quarter's $0.59 per share.

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Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 23.2%, 110 basis points worse than the prior-year quarter. Operating margin was 7.4%, 150 basis points worse than the prior-year quarter. Net margin was 5.4%, 450 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.48 billion. On the bottom line, the average EPS estimate is $0.57.

Next year's average estimate for revenue is $6.15 billion. The average EPS estimate is $2.50.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 619 members out of 642 rating the stock outperform, and 23 members rating it underperform. Among 213 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 208 give Embraer a green thumbs-up, and five give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Embraer is outperform, with an average price target of $34.63.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Embraer. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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