Embraer Meets on the Top Line, Misses Where it Counts

Embraer (NYSE: ERJ  ) reported earnings on March 13. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Embraer met expectations on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue shrank. Non-GAAP earnings per share grew. GAAP earnings per share grew.

Margins increased across the board.

Revenue details
Embraer reported revenue of $1.90 billion. The 11 analysts polled by S&P Capital IQ looked for sales of $1.90 billion on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.35. The 10 earnings estimates compiled by S&P Capital IQ forecast $0.90 per share. Non-GAAP EPS were $0.35 for Q4 compared to -$0.78 per share for the prior-year quarter. GAAP EPS were $0.68 for Q4 versus -$0.51 per share for the prior-year quarter.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 24.5%, 200 basis points better than the prior-year quarter. Operating margin was 12.0%, much better than the prior-year quarter. Net margin was 6.5%, much better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.27 billion. On the bottom line, the average EPS estimate is $0.48.

Next year's average estimate for revenue is $6.20 billion. The average EPS estimate is $2.67.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 608 members out of 633 rating the stock outperform, and 25 members rating it underperform. Among 207 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 203 give Embraer a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Embraer is outperform, with an average price target of $33.03.

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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Embraer-Empresa Brasileira. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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7/25/2014 4:00 PM
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