Embraer Tops Q2 Earnings Estimate, Reaffirms FY23 Outlook

Embraer SA ERJ reported a Q2 FY23 revenue of $1.292 billion, an increase of 27% Y/Y, beating the consensus of $1.162 billion.

Adjusted income per basic ADS was $0.32 versus $0.25 last year, which beat the consensus of $0.12.

Embraer delivered 47 jets in Q2 (+47% Y/Y), of which 17 were commercial aircraft and 30 were executive jets.

The company had a firm order backlog of $17.3 billion at the end of Q2 FY23. 

Adjusted EBIT margin contracted to 7.7% in Q2, compared to 8.0% in Q2 FY22, due to a different revenue mix. 

Adjusted EBITDA margin contracted to 11.5% from 12.2% a year ago.

Adjusted Free Cash Flow w/o EVE (FCF) stood at $(10.7) million vs. $114.2 million a year ago, with higher inventories due to larger deliveries in H2.

FY23 Guidance Reiterated: Embraer reaffirmed commercial jet deliveries of 65-70 aircraft and executive jet deliveries of 120-130 aircraft.

The company sees revenues of $5.2 billion-$5.7 billion vs. consensus of $5.44 billion, an Adjusted EBIT margin of 6.4%-7.4%, and an Adjusted EBITDA margin of 10%-11%.

ERJ expects FY23 adjusted free cash flow of $150 million or better for the year.

Also Read: Embraer Inks Pact With China's Lanzhou Aviation For Freight Conversion Deal

Price Action: ERJ shares are trading lower by 4.55% at $14.28 on the last check Monday.