Investors have gotten used to maintaining low expectations for Brazilian aircraft manufacturer Embraer (NYSE:ERJ). While the company's planes are popular with regional airlines and fliers, Embraer has posted weak earnings recently -- primarily because of low demand for business jets and margin pressure in its defense business.

Indeed, in three of the past four quarters, earnings per share have fallen short of analysts' estimates. As a result, Embraer stock has been mired below the $20 mark for much of the past year.

ERJ Chart

Embraer stock performance data by YCharts.

However, Embraer may finally be ready to surprise investors in a good way. Based on publicly available information, the company appears to have delivered significantly more commercial jets this quarter than it did in the year-ago period.

Commercial-jet deliveries rise

The commercial-jet business is by far Embraer's largest business segment, accounting for about 57% of its revenue in the past two years. It is also dramatically more profitable than Embraer's executive jets and defense segments, routinely producing double-digit operating margin.

In the second quarter of 2016, Embraer delivered 26 commercial jets, en route to 108 deliveries for the full year. Last quarter, it delivered at least 31 commercial jets, based on data from, consisting of 27 E175 jets, two E190s, and two E195s.

The biggest driver of this uptick in deliveries is that United Continental (NASDAQ:UAL) is refreshing its regional fleet. United plans to add 33 E175s to its fleet this year, replacing a variety of smaller, less efficient regional airplanes. United Continental's regional affiliates took delivery of 14 of those planes last quarter, after taking just two in Q1.

An Embraer E175 jet

Embraer's E175 jet is very popular with U.S. regional airlines. Image source: Embraer.

In Q2 2016, Embraer generated $857 million of revenue in its commercial aviation segment. With at least five more deliveries this year compared with last year, the commercial-jet business probably produced at least $1 billion of revenue last quarter. The higher number of deliveries should also lead to a higher profit margin, as Embraer will be able to spread its fixed costs over more revenue.

Improvements in the rest of the business

Embraer's defense business is also likely to report improved results in the second quarter. A satellite launch in May produced about $100 million of high-margin revenue. Given that the entire segment produced $210 million of revenue in Q2 2016, there's a good chance Embraer posted revenue growth in the defense segment, as well.

By contrast, Embraer probably didn't post strong revenue growth in its executive-jets segment. Demand for private jets remains well below the peak of a decade ago.

That said, Embraer's guidance implies that executive jet deliveries should be roughly even with last year's level or even slightly higher for the rest of 2017. Furthermore, Embraer has made a strategic decision to protect its margin in the executive jets segment, even if that means walking away from some deals. Thus, this segment could be another source of year-over-year profit growth for Embraer.

Is it sustainable?

With all three of Embraer's major business units likely to report solid results in Q2, analysts may be underestimating the company's potential earnings for the quarter. However, that won't matter much if it's a fluke and Embraer's earnings go back downhill thereafter.

Embraer does expect commercial aircraft deliveries to decline temporarily as it switches to producing its next-generation E2-series jets. But its order backlog for the rest of 2017 looks pretty solid, with more than 30 E175s scheduled for delivery to United Continental and other U.S. legacy carriers. Orders from international airlines should help Embraer get the rest of the way to its full-year guidance of 97 to 102 commercial-jet deliveries.

Looking ahead to 2018, Embraer has some work to do to fill in its order book. However, the company continues to find buyers for its current-generation jets. American Airlines Group ordered four more E175s in April, and Embraer announced firm orders for eight additional E-Jets at last month's Paris Air Show.

Embraer may post unusually good results for the second quarter, followed by weaker results in Q3 or Q4. But once it gets production of its next-generation products up and running over the next couple of years, earnings should start to move steadily higher.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.