A 2006 Nosedive for Embraer: Fool by Numbers

Yesterday, Stock Advisor selection Embraer (NYSE: ERJ  ) released earnings for the fiscal year ending Dec. 31.

  • Embraer missed estimates on the top line, but beat the bottom line for both the quarter and the year.
  • Management attributed the revenue shortfalls to production problems with the E190 and E195 regional jets, which have been adopted by JetBlue (Nasdaq: JBLU  ) and US Airways (NYSE: LCC  ) , among others.
  • Nevertheless, those following the stock in our 100% free Motley Fool CAPS investor-intelligence database give Embraer the maximum five stars. Do you agree? Click here now to join CAPS and rate the stock.

(Figures in thousands, except per-share data)

Income Statement Highlights

FY 2006

FY 2005

Change

Sales

$3,807,403

$3,829,907

(0.6%)

Net Profit

$390,140

$445,719

(12.5%)

EPS

$2.10

$2.54

(17.3%)

Diluted Shares

742,903

725,283

2.4%



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

Margin Checkup

FY 2006

FY 2005

Change*

Gross Margin

28.13%

30.24%

(2.11)

Operating Margin

8.08%

13.26%

(5.18)

Net Margin

10.25%

11.64%

(1.39)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

FY 2006

FY 2005

Change

Cash + ST Invest.

$1,765,191

$1,913,554

(7.8%)

Accounts Rec.*

$1,113,984

$1,305,044

(14.6%)

Inventory

$1,477,559

$2,047,245

(27.8%)



Liabilities

FY 2006

FY 2005

Change

Accounts Payable

$912,754

$728,011

25.4%

Total Debt

$829,758

$819,253

1.3%



Learn the ways of the balance sheet.

Cash Flow Checkup

FY 2006

FY 2005

Change

Cash From Ops.

$319,127

$346,909

(8.0%)

Capital Expenditures

$88,479

$51,766

70.9%

Free Cash Flow

$230,648

$295,143

(21.9%)



Find out why Fools always follow the money.

Related Foolishness:

Embraer and JetBlue are Stock Advisor picks. Click here to get access to get 30 days of free access to the entire portfolio, which is beating the market by more than 39%.

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.

Fool contributor Tim Beyers, who is ranked 1,358 out of more than 24,900 in our Motley Fool CAPS investor intelligence database, didn't own shares in any of the companies mentioned in this article at the time of publication. All of his portfolio holdings can be found at Tim's Fool profile. His thoughts on Foolishness and investing may be found in his blog. The Motley Fool's disclosure policy is always on time for departure.


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