Embraer Goes Negative

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

The 10-second takeaway
For the quarter ended June 30 (Q2), Embraer beat expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue shrank. Non-GAAP earnings per share dropped significantly. GAAP earnings per share dropped to a loss.


Margins dropped across the board.

Revenue details
Embraer recorded revenue of $1.56 billion. The 11 analysts polled by S&P Capital IQ expected revenue of $1.50 billion on the same basis. GAAP reported sales were 6.7% lower than the prior-year quarter's $1.67 billion.

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 $0.50. The 10 earnings estimates compiled by S&P Capital IQ forecast $0.53 per share. Non-GAAP EPS of $0.50 for Q2 were 51% lower than the prior-year quarter's $1.03 per share. GAAP EPS were -$0.03 for Q2 against $0.54 per share for the prior-year quarter.

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 23.1%, 50 basis points worse than the prior-year quarter. Operating margin was 8.7%, 340 basis points worse than the prior-year quarter. Net margin was -0.3%, 620 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.51 billion. On the bottom line, the average EPS estimate is $0.66.

Next year's average estimate for revenue is $6.14 billion. The average EPS estimate is $2.43.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 605 members out of 630 rating the stock outperform, and 25 members rating it underperform. Among 184 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 180 give Embraer a green thumbs-up, and four 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 $38.20.

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The article Embraer Goes Negative originally appeared on Fool.com.

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. The Motley Fool recommends Embraer-Empresa Brasileira. 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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