ERJ, Embraer Profit Rises 51%, Stock Jumps

Embraer shares are jumping today and the company reported net income of $ 153.8 million in the second quarter, up 51.2% from the $ 101.7 million for the same period of 2010.
Net income fell 10.9% to R $ 2.168 billion, compared to R $ 2.435 billion from April to June 2010. In the first half, net income totaled R $ 3.925 billion.

EBITDA (earnings before interest, taxes, depreciation and amortization) reached R $ 250.3 million in the second quarter, down 15.9% from the $ 297.7 million recorded in the same period last year. The EBITDA margin fell from 12.2% in the second quarter of 2010 to 11.5% in 2011. For the year, EBITDA totaled R $ 510.1 million.

Deliveries of Embraer in the second quarter of this year totaled 48 aircraft, 25 commercial jets and 23 jets. On June 30, 2011, the firm had an order backlog of $ 15.8 billion. In the same period last year the number of deliveries was 69 aircraft and the backlog totaled U.S. $ 15.2 billion.

Looking forward, the main expectations is with U.S. company Delta's decision to renew its fleet of regional jets, which will generate an order for 100 new aircraft. The announcement is expected in October. Moreover, the recent decision by Boeing to repalce the engines of its aircraft model 737, in search of lower fuel consumption, rather than developing a completely new plane, transfers to Embraer the decison and expectation of what to do in the future with their e-jets. Embraer was awaiting the announcement of Boeing to decide what to do. Airbus had already made a statement late last year to modernize its choice of its aircraft engines.