Embraer Lands: Fool by Numbers

On Nov. 13, jet maker and Motley Fool Stock Advisor pick Embraer (NYSE: ERJ  ) released Q3 2006 earnings for the period ending Sept. 30.

  • Neither sales nor per-share earnings met expectations, but investors haven't much cared. The shares are up roughly 3% since the earnings news first broke. That's Foolish. Embraer produced more than $460 million in cash during the quarter.

  • Management, for its part, says that higher operating costs and lower deliveries contributed to lower-than-expected sales and earnings. Production problems cut deliveries from 41 during last year's Q3 to 30 this year.

  • That would be a major red flag if orders weren't still pouring in. Embraer's backlog is up 30% from the second quarter, to $13.3 billion.

(Figures in thousands, except per-share data)

Income Statement Highlights

Q3 2006

Q3 2005

Change

Sales

$894,075

$1,064,332

(16%)

Net Profit

$61,352

$110,247

(44.4%)

EPS

$0.33

$0.63

(47.6%)

Diluted Shares

741,862

724,290

2.4%



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

Margin Checkup

Q3 2006

Q3 2005

Change*

Gross Margin

28.32%

28.14%

0.18

Operating Margin

5.19%

15.98%

(10.79)

Net Margin

6.86%

10.36%

(3.50)

* Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2006

Q3 2005

Change

Cash + ST Invest.

$2,107,045

$1,797,608

17.2%

Accounts Rec.

$399,348

$787,227

(49.3%)

Inventory

$1,638,835

$1,571,026

4.3%



Liabilities

Q3 2006

Q3 2005

Change

Accounts Payable

$808,582

$614,080

31.7%

Long-Term Debt

$828,444

$933,758

(11.3%)



Learn the ways of the balance sheet.

Cash Flow Checkup

Q3 2006*

Q3 2005*

Change

Cash From Ops.

$481,857

($315,394)

N/A

Capital Expenditures

$17,282

$20,402

(15.3%)

Free Cash Flow

$464,575

($335,796)

N/A

* Three-month total.

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  )
  • US 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, socheckFool.comformore of our in-depth discussion of what the numbers mean.

Embraer and JetBlue are both selections of theMotley Fool Stock Advisorstock-picking service. See all of the stocks that are helping David and Tom Gardner beat the S&P 500 by more than 44% as of this writing with a free, 30-day all-access pass.

Fool contributor Tim Beyers, ranked 1,622 out of 13,432 in Motley Fool CAPS, 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 always adds up.


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