Embraer Takes Off: Fool by Numbers

On Friday, Motley Fool Stock Advisor selection Embraer (NYSE: ERJ  ) released Q2 2006 earnings for the period ended June 30, 2006.

  • Sales and per-share earnings both easily topped estimates, despite a $4.2 million loss from currency effects. (The Brazilian real appreciated an average of 11.7% versus the U.S. dollar from last year's Q2.)
  • Gross margin, however, suffered. Higher costs related to ramping up the E190 and E195 regional jets contributed to the shortfall, as did currency effects.
  • Embraer's backlog dipped to $10.2 billion from $10.9 billion during last year's Q2. Nevertheless, the jet maker still expects to deliver 145 aircraft during 2006.

(Figures in thousands, except per-share data)

Income Statement Highlights

Avg. Est.

Q2 2006

Q2 2005

Change

Sales

$981,000

$1,020,971

$812,427

25.7%

Net Profit

--

$139,096

$82,943

67.7%

EPS

$0.64

$0.75

$0.47

59.6%

Diluted Shares

741,862

722,989

2.6%



Get back to basics with a look at the income statement.
Margin Checkup

Q2 2006

Q2 2005

Change*

Gross Margin

28.24%

31.42%

(3.18)

Operating Margin

13.21%

12.17%

1.04

Net Margin

13.62%

10.21%

3.41

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q2 2006

Q2 2005

Change

Cash + ST Invest.

$2,055,482

$1,175,352

74.9%

Accounts Rec.

$471,774

$904,796

(47.9%)

Inventory

$1,638,835

$1,713,141

(4.3%)



Liabilities

Q2 2006

Q2 2005

Change

Accounts Payable

$696,725

$627,229

11.1%

Long-Term Debt

$848,139

$981,462

(13.6%)



Learn the ways of the balance sheet.

Cash Flow Checkup

Q2 2006

Q2 2005

Change

Cash From Ops.

$11,293

$13,521

(16.5%)

Capital Expenditures

$33,687

$16,325

106.4%

Free Cash Flow

($22,394)

($2,804)

N/A



Find out why Fools always follow the money.

Related Companies:

  • Airbus
  • Boeing (NYSE: BA  )
  • Bombardier
  • General Dynamics (NYSE: GD  )
  • JetBlue (Nasdaq: JBLU  )
  • Textron (NYSE: TXT  )
  • U.S. Airways (NYSE: LCC  )

Related Foolishness:

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

Both Embraer and JetBlue are Motley Fool Stock Advisor recommendations. As for an all-access pass to the service and you'll get 30 days to find out how David and Tom Gardner are walloping the market by nearly 35%.

Fool contributor Tim Beyers didn't own shares in any of the companies mentioned in this story at the time of publication. You can find out which stocks he owns by checking Tim's Fool profile. The Motley Fool's disclosure policy is always on time for departure.


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 515400, ~/Articles/ArticleHandler.aspx, 12/21/2014 2:09:20 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement