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Embraer S.A. (ERJ - Free Report) reported a third-quarter 2023 adjusted income of 18 cents per American Depository Share (“ADS”), beating the Zacks Consensus Estimate of 14 cents per ADS by 28.6%. Moreover, earnings came in higher than 13 cents per ADS reported in the prior-year quarter.
Total Revenues
Embraer’s third-quarter revenues were $1,284.4 million, up 38.3% year over year, primarily due to higher revenues in all four business segments. However, the reported figure missed the Zacks Consensus Estimate of $1,484 million by 13.4%.
Embraer-Empresa Brasileira de Aeronautica Price, Consensus and EPS Surprise
Embraer delivered 43 jets in the reported quarter. ERJ delivered 15 commercial and 28 executive (19 light and nine midsize) jets compared with 17 commercial and 30 executive (19 light and 11 midsize) jets in the prior quarter.
The backlog at the end of the third quarter was $17.8 billion compared with $17.3 billion at the end of the second quarter of 2023.
Operational Highlights
Embraer’s adjusted operating income was $100.1 million in the third quarter of 2023 compared with the $49.9 million reported in the third quarter of 2022.
The company posted a quarterly adjusted EBITDA of $149.3 million, increasing 37.8% from the year-earlier quarter.
Financial Update
As of Sep 30, 2023, ERJ’s cash and cash equivalents amounted to $1,030.5 million compared with $1,816.9 million as of Dec 31, 2022.
The company had net debt of $1,112.3 million as of Sep 30, 2023, up from $721.9 million as of Dec 31, 2022.
Its adjusted free cash outflow in the third quarter was $44 million against the free cash outflow of $92.4 million reported in the prior-year period.
Guidance
Embraer reaffirmed its guidance for 2023. Its commercial jet deliveries are projected in the band of 65-70 jets, while Executive Aviation deliveries are expected in the band of 120-130 aircraft.
The company expects to generate revenues in the range of $5.2-$5.7 billion in 2023. Embraer anticipates the adjusted EBIT margin in the range of 6.4%-7.4% and the adjusted EBITDA margin in the band of 10%-11% in 2023. It expects free cash flow of $150 million or more for 2023.
Hexcel Corporation (HXL - Free Report) reported third-quarter 2023 adjusted earnings of 38 cents per share, which missed the Zacks Consensus Estimate of 42 cents by 9.5%. However, the bottom line improved 15.2% from the year-ago earnings of 33 cents per share.
In the third quarter, net sales totaled $420 million, which missed the Zacks Consensus Estimate of $431 million by 2.6%. However, the top line witnessed an improvement of 15% from the year-ago quarter’s $365 million.
Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2023 adjusted earnings of $6.77 per share, which beat the Zacks Consensus Estimate of $6.66 by 1.7%. However, the bottom line deteriorated 1.5% from the year-ago quarter's recorded figure.
Net sales were $16.88 billion in the reported quarter, which surpassed the Zacks Consensus Estimate of $16.66 billion by 1.3%. The top line rose 1.8% from $16.58 billion reported in the year-ago quarter.
Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) reported third-quarter 2023 adjusted earnings of 12 cents per share, up 50% from 8 cents reported in the prior-year quarter. The bottom line also surpassed the Zacks Consensus Estimate of 8 cents by 50%.
Total revenues were $274.6 million, which surpassed the Zacks Consensus Estimate of $252 million by 9%. Total revenues also increased 20.1% from $228.6 million recorded in the year-ago quarter.
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Embraer (ERJ) Q3 Earnings Surpass Estimates, Revenues Rise Y/Y
Embraer S.A. (ERJ - Free Report) reported a third-quarter 2023 adjusted income of 18 cents per American Depository Share (“ADS”), beating the Zacks Consensus Estimate of 14 cents per ADS by 28.6%. Moreover, earnings came in higher than 13 cents per ADS reported in the prior-year quarter.
Total Revenues
Embraer’s third-quarter revenues were $1,284.4 million, up 38.3% year over year, primarily due to higher revenues in all four business segments. However, the reported figure missed the Zacks Consensus Estimate of $1,484 million by 13.4%.
Embraer-Empresa Brasileira de Aeronautica Price, Consensus and EPS Surprise
Embraer-Empresa Brasileira de Aeronautica price-consensus-eps-surprise-chart | Embraer-Empresa Brasileira de Aeronautica Quote
Order & Delivery
Embraer delivered 43 jets in the reported quarter. ERJ delivered 15 commercial and 28 executive (19 light and nine midsize) jets compared with 17 commercial and 30 executive (19 light and 11 midsize) jets in the prior quarter.
The backlog at the end of the third quarter was $17.8 billion compared with $17.3 billion at the end of the second quarter of 2023.
Operational Highlights
Embraer’s adjusted operating income was $100.1 million in the third quarter of 2023 compared with the $49.9 million reported in the third quarter of 2022.
The company posted a quarterly adjusted EBITDA of $149.3 million, increasing 37.8% from the year-earlier quarter.
Financial Update
As of Sep 30, 2023, ERJ’s cash and cash equivalents amounted to $1,030.5 million compared with $1,816.9 million as of Dec 31, 2022.
The company had net debt of $1,112.3 million as of Sep 30, 2023, up from $721.9 million as of Dec 31, 2022.
Its adjusted free cash outflow in the third quarter was $44 million against the free cash outflow of $92.4 million reported in the prior-year period.
Guidance
Embraer reaffirmed its guidance for 2023. Its commercial jet deliveries are projected in the band of 65-70 jets, while Executive Aviation deliveries are expected in the band of 120-130 aircraft.
The company expects to generate revenues in the range of $5.2-$5.7 billion in 2023. Embraer anticipates the adjusted EBIT margin in the range of 6.4%-7.4% and the adjusted EBITDA margin in the band of 10%-11% in 2023. It expects free cash flow of $150 million or more for 2023.
Zacks Rank
Embraer currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Hexcel Corporation (HXL - Free Report) reported third-quarter 2023 adjusted earnings of 38 cents per share, which missed the Zacks Consensus Estimate of 42 cents by 9.5%. However, the bottom line improved 15.2% from the year-ago earnings of 33 cents per share.
In the third quarter, net sales totaled $420 million, which missed the Zacks Consensus Estimate of $431 million by 2.6%. However, the top line witnessed an improvement of 15% from the year-ago quarter’s $365 million.
Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2023 adjusted earnings of $6.77 per share, which beat the Zacks Consensus Estimate of $6.66 by 1.7%. However, the bottom line deteriorated 1.5% from the year-ago quarter's recorded figure.
Net sales were $16.88 billion in the reported quarter, which surpassed the Zacks Consensus Estimate of $16.66 billion by 1.3%. The top line rose 1.8% from $16.58 billion reported in the year-ago quarter.
Kratos Defense & Security Solutions, Inc. (KTOS - Free Report) reported third-quarter 2023 adjusted earnings of 12 cents per share, up 50% from 8 cents reported in the prior-year quarter. The bottom line also surpassed the Zacks Consensus Estimate of 8 cents by 50%.
Total revenues were $274.6 million, which surpassed the Zacks Consensus Estimate of $252 million by 9%. Total revenues also increased 20.1% from $228.6 million recorded in the year-ago quarter.