The airline industry has seen unprecedented success in recent years, and that has prompted many airlines to make major capital commitments to update their aging fleets. With its emphasis on smaller regional jet aircraft, Embraer (ERJ 6.40%) has done a good job of picking up its fair share of demand. Yet the stock has gotten hit hard by weak economic conditions in its home country of Brazil, and shareholders have wondered if they should give up hope that the aircraft manufacturer will be able to catch up with much better performance from larger industry peers.

Coming into the jet maker's second-quarter financial report, Embraer investors wanted to see big gains in sales and a turnaround on the bottom line. Embraer posted much better performance than most had expected, and unexpectedly large numbers of jet deliveries in the commercial segment pointed to the potential for a strong rebound for the rest of the year. Let's look more closely at Embraer and its latest results.

Embraer E2 model aircraft.

Image source: Embraer.

Embraer powers higher

Embraer's second-quarter results were a welcome turnaround from sluggish conditions earlier in the year. Revenue soared almost 30% to $1.77 billion, easily crushing the $1.6 billion in sales that most investors were looking to see. Adjusted net income nearly tripled from year-ago levels to $123 million, and that resulted in adjusted earnings of $0.67 per share, well above the consensus forecast for $0.50 per share among those following the stock.

Looking more closely at the numbers, Embraer enjoyed success throughout its business. The commercial aviation segment posted a 27% revenue gain, while the defense and security segment did even better, with gains of almost 60%. The executive jets division lagged behind but still saw sales pick up by 16% from year-ago levels.

On the delivery front, the quarter was a good one. Embraer delivered 35 commercial aircraft during the quarter, nearly doubling what it accomplished in the first quarter of 2017. E-175 regional jets made up 31 of the planes delivered, with two E-190 and two E-195 models also sent to customers. Executive jet deliveries also picked up sequentially, even though they were down slightly from the year-ago quarter. A big boost in large business jets, which doubled from the first quarter, helped to drive numbers higher for the unit overall. The first delivery of the Phenom 100 EV aircraft was a milestone for Embraer. The only downside was a drop in backlog to $18.5 billion, which was well below the corresponding figure of $21.9 billion this time last year.

What's ahead for Embraer?

Embraer has high hopes for the future. At the recent Paris Air Show, the company debuted several new aircraft, including flights of its E195-E2 next-generation commercial jet and its KC-390 multimission transport plane. Embraer also highlighted its Legacy 450 mid-to-light business jet in Paris, and the company got more than 50 commitments in Paris, including 18 firm orders for E-175, E-190, and E-195-E2 model planes.

Embraer also made progress beyond the aircraft business. The company launched a Brazilian satellite successfully in May, and it's working in partnership with several other companies to help come up with air traffic control radar solutions to improve reliability and boost capacity of the aging air traffic control system.

What was slightly surprising was that even with the solid performance, Embraer didn't boost its outlook on either the financial or delivery count fronts. The aircraft manufacturer repeated its call for 97 to 102 commercial jet deliveries and 105 to 125 executive jet deliveries. Between 70 and 80 of those executive aircraft should be light jets, with the other 35 to 45 being large jets.

Shares didn't make big moves based on the news, and the stock was almost unchanged at midday following the announcement. The company has done a great job of recovering from a slow start to the year, and Embraer has even more room to fly the quarters to come.