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Positive first quarter for Embraer

Embraer has reported a net income of $35 million in its first quarter 2010 (1Q10) results.

During 1Q10 Embraer’s jet deliveries totalled 41 aircraft including 21 commercial jets, 19 executive jets, and one for defence. Net sales for the quarter reached $990 million, and gross margin improved from 18.2% in 1Q09 to 21.7% in 1Q10.

EBIT and EBITDA margins in 1Q10 were 5.8% and 8.1% respectively, the first being in line with the 6% EBIT margin guidance and the latter higher than EBITDA margin projection of 7.5%;. The company’s net cash position was $458.6 million at the end of the quarter.

This all led to the aforementioned 1Q10 net income attributable to Embraer totalling $35.3 million, as opposed to a loss of $23.4 million in 1Q09.

As a result of a smaller number of aircraft delivered in 1Q10 compared to 1Q09, and a different mix of products, net sales came down from $1,154.1 million in 1Q09 to $990.1 million in 1Q10.

Commercial aviation deliveries continued to be affected by the global crisis, the company reports. Although, the global economy is recovering, 1Q10 deliveries totalled 21 aircraft, five lower than 4Q09 and 11 below 1Q09. The delivery mix in 1Q10 was one ERJ 145, five E-170s, one E-175, 12 E-190s and two E-195s.

In terms of aircraft demand, the effects of the recovery can be perceived from the total number of Embraer’s ongoing sales campaigns, which is more than 2.5 times higher than in the last quarter of 2009.

The firm backlog comprises 243 aircraft – seven ERJ 145 family aircraft and 236 E-Jets.

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