On May 14, Brazilian airplane maker (and Motley Fool Stock Advisor recommendation) Embraer (NYSE:ERJ) released first-quarter earnings for the period ended March 31.

  • Revenues increased by 4%, thanks to better a product mix and higher unit pricing, partially offset by a 7% decline in the number of aircraft delivered.
  • Costs were higher this quarter, as the firm hired and trained 2,000 employees for an expected production ramp-up.
  • Our Motley Fool CAPS community collectively gives the stock a solid four-star rating.

(Figures in millions, except per-share data.)

Income Statement Highlights

Q1 2007

Q1 2006

Change

Sales

$843.4

$808.3

4.3%

Net Profit

$26.2

$65.3

(59.9%)

EPS

$0.14

$0.37

(62.2%)

*Earnings per diluted ADS.

Get back to basics with the income statement.

Margin Checkup

Q1 2007

Q1 2006

Change*

Gross Margin

25.7%

28.7%

(3.0)

Operating Margin

0.5%

4.5%

(4.0)

Net Margin

3.1%

8.1%

(5.0)

*Expressed in percentage points.

Margins are the earnings engine.

Balance Sheet Highlights

Assets

Q1 2007

Q1 2006

Change

Cash + ST Invest.

$1,440.9

$1,694.0

(14.9%)

Accounts Rec.

$276.0

$482.1

(42.8%)

Inventory

$2,317.4

$1,647.9

40.6%

Liabilities

Q1 2007

Q1 2006

Change

Accounts Payable

$741.0

$906.9

(18.3%)

Long-Term Debt

$1,037.0

$1,488.6

(30.3%)

The balance sheet reflects the company's health.

Cash Flow Highlights

Q1 2007

Q1 2006

Change

Cash From Ops.

($52.0)

($518.4)

N/A

Capital Expenditures

$44.8

$19.1

134.5%

Free Cash Flow

($96.8)

($537.5)

N/A

Free cash flow is a Fool's best friend.

Related Foolishness:

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