Embraer Misses on the Top and Bottom Lines

Embraer (NYSE: ERJ  ) reported earnings on April 30. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended March 31 (Q1), Embraer missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue was unchanged. GAAP earnings per share dropped significantly.

Margins contracted across the board.

Revenue details
Embraer recorded revenue of $1.09 billion. The 10 analysts polled by S&P Capital IQ looked for revenue of $1.14 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 $0.16. The nine earnings estimates compiled by S&P Capital IQ anticipated $0.38 per share. GAAP EPS of $0.16 for Q1 were 53% lower than the prior-year quarter's $0.34 per share.

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 22.2%, 100 basis points worse than the prior-year quarter. Operating margin was 3.7%, 60 basis points worse than the prior-year quarter. Net margin was 2.8%, 260 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
Next quarter's average estimate for revenue is $1.51 billion. On the bottom line, the average EPS estimate is $0.64.

Next year's average estimate for revenue is $6.14 billion. The average EPS estimate is $2.50.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 605 members out of 630 rating the stock outperform, and 25 members rating it underperform. Among 191 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 188 give Embraer a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Embraer is hold, with an average price target of $36.58.

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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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