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What Does Wall Street See for Embraer's Q3?

By Seth Jayson - Updated Apr 7, 2017 at 12:19PM

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Checking expectations

Embraer (NYSE: ERJ) is expected to report Q3 earnings on Oct. 23. Here's what Wall Street wants to see:

The 10-second takeaway
Comparing the upcoming quarter to the prior-year quarter, average analyst estimates predict Embraer's revenues will increase 1.1% and EPS will contract -20.6%.

The average estimate for revenue is $1.38 billion. On the bottom line, the average EPS estimate is $0.54.

Revenue details
Last quarter, Embraer reported revenue of $1.72 billion. GAAP reported sales were 20% higher than the prior-year quarter's $1.39 billion.

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

EPS details
Last quarter, non-GAAP EPS came in at $1.03. GAAP EPS of $0.31 for Q2 were 43% lower than the prior-year quarter's $0.54 per share.

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

Recent performance
For the preceding quarter, gross margin was 23.6%, 120 basis points better than the prior-year quarter. Operating margin was 13.7%, 770 basis points better than the prior-year quarter. Net margin was 3.4%, 370 basis points worse than the prior-year quarter.

Looking ahead

The full year's average estimate for revenue is $6.01 billion. The average EPS estimate is $2.29.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 615 members out of 638 rating the stock outperform, and 23 members rating it underperform. Among 195 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 190 give Embraer a green thumbs-up, and five 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 $34.80.

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 has no positions in the stocks mentioned above. Motley Fool newsletter services recommend 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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