SAO PAULO (Reuters) -Brazilian planemaker Embraer's second-quarter net income jumped by almost 40%, it said on Thursday, beating market expectations and sending its shares sharply higher after increased deliveries of commercial aircraft.
The world's third-largest planemaker behind Airbus and Boeing (NYSE:BA) posted adjusted net profit of $80.4 million in the three months to June 30, exceeding the $47.66 million forecast by analysts polled by LSEG.
Embraer had previously reported deliveries of 19 commercial jets in the period, up 12% year on year, pushing up revenue and helping to offset a 10% drop in business jet deliveries.
Sao Paulo-traded shares of the planemaker rose as much as 9.5% after the results, making it one of the top performers on benchmark stock index Bovespa and extending its year-to-date gain to more than 85%.
The company reaffirmed its outlook for 2024, which includes the delivery of between 72 and commercial aircraft, and 125-135 executive jets, bringing in revenue of between $6 billion and $6.4 billion.
"We are fully committed to reaching our full-year guidance, despite all the ongoing supply-chain constraints we continue to deal with," Chief Financial Officer Antonio Carlos Garcia told a call with analysts.
Revenue for the quarter was $1.49 billion, up 15.6% from a year earlier and slightly more than the $1.45 billion expected by analysts. Its commercial aviation and defense arms stood out with 17% and 130% rises, respectively.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) rose 27.9% to $190.4 million, beating the $135.45 million expected by analysts, while the EBITDA margin grew 120 basis points to 12.7%.
Analysts at BTG Pactual said the results were solid and highlighted the company's strong margins, reiterating their "buy" rating for the shares which they see as offering "nice exposure" to the aviation industry at a compelling valuation.
Embraer voiced optimism about fresh commercial jet orders soon and sees room to expand the presence of its E2 jets in the Brazilian market, as it holds talks with local airlines such as LATAM for potential deals.
The planemaker, whose traditional niche fits just below Boeing's and Airbus's best-selling 150-seat plus market, has been experiencing positive demand amid the larger peers' extended delivery deadlines.
Sales so far this year include 20 E2 jets to state-run Mexicana de Aviacion and 90 E175 aircraft to American Airlines (NASDAQ:AAL).
"We are working on a lot of sales campaigns in basically all regions of the world, so we are confident that we will bring good news soon about new orders," CEO Francisco Gomes Neto said.
($1 = 5.6369 reais)