Embraer is bullish about the next quarters as Q2 earnings exceed expectations

Embraer, a Brazilian aircraft manufacturer, exceeded market expectations for its second-quarter results. CEO Francisco Gomes Neto expressed positivity for the company's upcoming quarters, stating that there is a good chance Embraer will deliver 80 or more commercial aircraft next year, up from the previous forecast of 70 in 2023, and return to delivering 100 or more by 2025 or 2026. 


Despite facing supply chain challenges, Gomes Neto remains optimistic about Q3 and Q4, with new deals in the commercial and defense units expected in the second half of the year. Embraer disclosed the delivery of 47 aircraft in the quarter, indicating that it is on track to meet its target of delivering up to 200 jets overall this year. 

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The company has already signed a deal with an undisclosed client that will increase its backlog by $700 million in the third quarter. Embraer's second-quarter adjusted net profit rose by 25% to $57.9 million, more than double the forecast of analysts polled by Refinitiv. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) came in at $148.9 million, up 20% from the previous year. 

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JPMorgan analysts highlighted its EBITDA margin of 11.5% as particularly strong. Embraer maintained its outlook for the year, with net revenue forecast to rise by as much as 27% to between $5.2 billion and $5.7 billion. Analysts at BTG Pactual noted that Embraer's quarterly figures and backlog indicate strong results for the year.

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