Embraer 4Q Results More Glum than Good

 - March 31, 2009, 10:20 AM

Brazilian aircraft manufacturer Embraer released its fourth-quarter results last Friday, noting a net income of $111.7 million, down from $200.9 million for the same period in 2007. Fourth-quarter profits fell 44 percent from fourth-quarter 2007 levels, blamed on losses to currency hedging and a drop in the Brazilian real. The news follows an announcement earlier this month of production cutbacks and layoffs totaling about 20 percent of the workforce. Despite a dramatic drop in deliveries in the fourth quarter, the company nevertheless handed over 204 airplanes for the year, “The highest ever delivery figure,” said Embraer president and CEO Frederico Fleury Curado. He cited difficulties in finding financing as a factor affecting sales over the past six months and noted existing order cancellations and deferrals. Embraer had earlier forecast deliveries of 145 business jets this year, but Curado amended that to 127–110 Phenom 100s and Phenom 300s and 17 Legacys and Lineage 1000s. He said he expects no depletion of the backlog, currently at more than 800 aircraft, going forward through next year.