Brazilian aircraft manufacturer Empresa Brasileira de Aeronautica S.A., or Embraer (ERJ) agreed to deliver fifteen EMBRAER 175 and five EMBRAER 190 jets to Alitalia, a leading Italian airline.
The delivery is expected to begin in the third quarter 2011. EMBRAER 175 and EMBRAER 190 have a seating capacity of 88 and 100, respectively.
In mid-March, the company delivered the nineteent EMBRAER 195 jet to Azul Linhas Aéreas Brasileiras, which was the 100th E-Jet to go into operation in Latin America and the Caribbean. Embraer has a 79% market share in commercial jets having 61 to 120 seats.
The company also entered a contract to purchase a 64.7% stake in the radar division of OrbiSat da Amazônia S.A. for R$ 28.5 million. This would extend the footprint of Embraer’s Defense and Security in the Brazilian Defense System.
During the fourth quarter of fiscal 2010, the company delivered 92 aircraft, up from 44 aircraft in the previous quarter. Out of these 92 aircraft, 30 have been delivered to commercial aviation, 61 to executive aviation and 1 to the defense segment. Embraer recorded a firm order backlog of $15.6 billion, marginally up from $15.3 billion at the end of third quarter of fiscal 2010.
The gradual economic recovery is encouraging almost all the industries to open up. Even the airline industry, which was severely hit during the recession, is also looking for opportunities.
It is remarkable that Embraer has been able to pull through the challenging period with impressive results. Further, the company’s product portfolio supports stronger customer orders and deliveries.
Thus, in the long term, we have an Outperform recommendation on the company. The stock currently retains its short-term Strong Buy rating with the Zacks #1 Rank.
EMBRAER AIR-ADR (ERJ): Free Stock Analysis Report
Zacks Investment Research
