Embraer-Empresa Brasileira de Aeronautica (NYSE:ERJ) – Why are Embraer shares trading lower today?

  • Embraer S.A. (NYSE: ERJ) reported fourth-quarter revenue of $1.3 billion, down 29.3% year-over-year.
  • Basic ADS-adjusted revenue was $0.3116 versus ($0.0679) last year.
  • Embraer delivered 55 jets in the fourth quarter, of which 16 were commercial aircraft and 39 were business jets. It delivered a total of 141 jets in FY21.
  • Read also: Embraer enters the air cargo market with passenger-to-cargo conversions
  • The company had a firm backlog of $17.0 billion at the end of 4Q21. Book to bill beyond 2:1 for sales reps and executives.
  • Adjusted EBIT margin improved to 4.3% from 4.2% in 4Q20. The adjusted EBITDA margin fell from 7.9% in 4Q20 to 8.2%.
  • The Net Debt/EBITDA ratio decreased from 5.6x in 2019 to 3.5x in FY21.
  • The company reported a strong improvement in its free cash flow (FCF) in 4Q21, with cash generation of $452.6 million, resulting in full-year FCF of $292.4 million.
  • Related: EVTOL Eve Divests from Embraer and the SPAC Deal: What Investors Need to Know
  • Guidance for exercise 22 (without Eve): Embraer expects commercial jet deliveries of 60-70 aircraft and business jet deliveries of 100-110 aircraft.
  • It forecasts revenue of $4.5 billion to $5 billion, adjusted EBIT margin of 3.5% to 4.5%, adjusted EBITDA margin of 8.0% to 9.0% and an FCF of $50 million or more.
  • Price Action: ERJ shares are trading down 15.1% to $11.26 when last checked on Thursday.

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