Embraer Executive Jets 'coming out of the woods' after soft first quarter

Embraer Executive Jets recorded a 27% fall in revenues in the first quarter of 2018 as aircraft output fell, but the airframer is confident it will reach its delivery guidance for the year as sales activity gathers pace.

For the three months ended 31 March, the Brazilian airframer shipped 11 aircraft. This comprised eight light jets: five Phenom300s – including the first example of the upgraded E variant – and three Phenom 100s. A pair of Legacy 450s and a single Legacy 500 made up the large-jet deliveries.

This performance compared with 11 light jets and four large jets shipped during the first quarter of 2017: eight Phenom 300s and three Phenom 100s, and one each of the Legacy 450, 500, 650 and Lineage 1000E.

The dip in output contributed to a $47 million year-on-year fall in revenues for the quarter to $128 million.

Speaking on a 27 April earnings call, Embraer chief executive Paulo Cesar de Souza e Silva said customer rescheduling pushed backed delivery of five business aircraft from the first to the second quarter, which had a "major impact" on the performance of the division.

Despite the "soft deliveries", he is confident that the unit will hit its 2018 guidance of 105-125 aircraft. Silva points to a stabilisation of new aircraft prices, a reduction in the pre-owned inventory and an increase in sales activity – particularly in the US and European markets – as reasons for his optimism."We are more positive this year," he says. "So I think we are coming out of the woods finally."

(Evangle Luo of TTFLY shared with you)