Embraer shares surge on record second-quarter revenue, raised guidance

By Isabel Teles

SAO PAULO, Aug ‌10 (Reuters) - Brazilian ​planemaker Embraer ​reported record second-quarter revenue of 11.34 billion reais ($2.23 billion) on Monday, up 10% from a year earlier, alongside a broadly ‌strong performance that triggered a 7% rise in its shares.

The world's ⁠third-largest aircraft manufacturer's net profit rose 25% year-on-year to 1.11 billion reais, and EBITDA increased ‌30% to 1.81 billion reais.

Scotiabank ‌analysts said Embraer's operating performance was strong and broad-based, with sales increasingly weighted toward the company's higher-margin business segments.

Embraer said its Defense & Security arm ​remained a standout performer, with revenue rising 22% from a year earlier, driven by stronger revenue for KC-390 Millennium aircraft.

The company delivered 65 ⁠aircraft in the second quarter, comprising 45 executive jets and 20 commercial jets, a 7% increase from ​a year earlier.

"We expect that in 2027 we'll see a much better performance in terms of production leveling, which will ​help us to see a higher productivity and ‌higher efficiency of our lines," CEO Francisco Gomes Neto told an earnings call.

In commercial aviation, Embraer expects to expand ⁠production capacity to 110 to 120 aircraft a year by 2030, another executive added.

Embraer is pursuing opportunities in India and the United States that could support the establishment ⁠of additional KC-390 Millennium assembly lines outside Brazil, potentially boosting production capacity depending on the ​size of future orders, executives said.

The firm's shares outperformed Brazil's benchmark Bovespa index, climbing some 7%, while the broader market declined 0.7%. Year to date, the stock is up ‌11.1%.

Embraer raised its 2026 free cash flow forecast to $400 million or more, from previous guidance of $200 million or more. ‌It now expects an adjusted EBIT margin of between 10.0% and 10.6% this ⁠year, up from a previous ‌forecast of 8.7% to 9.3%.

Aircraft ​deliveries and consolidated revenue remained unchanged.

($1 = 5.0854 reais)

(Reporting by Isabel Teles in Sao Paulo; Additional reporting by Michael Susin and ‌Alexander Smith)

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