By Gabriel Araujo
SAO PAULO (Reuters) -Brazilian planemaker Embraer on Tuesday reaffirmed its full-year outlook after posting a smaller first-quarter net loss, while rebuffing speculation that it plans to develop a new jet.
The world's third-largest planemaker after Airbus and Boeing (NYSE:BA) said in a securities filing its quarterly adjusted net loss stood at $12.8 million, less than the $88.9 million loss it posted a year earlier.
The improved results came in as Embraer delivered a total 25 jets in the period, 67% more than a year ago, leading its net revenues to jump 25% to $897 million in a period in which deliveries are seasonally weaker.
Executive aviation stood out with the highest first-quarter revenues over the past eight years, the company said, noting its firm order backlog for all units hit a seven-year high on strong sales activity.
"We currently have concrete sales campaigns for more than 200 aircraft across the world," CEO Francisco Gomes Neto told an earnings call, noting Embraer's availability of production slots from 2026 helps it as carriers face a global aircraft shortage.
Embraer reaffirmed its estimates for 2024, including deliveries of 72 to 80 commercial aircraft and 125 to 135 executive jets, with total revenues expect to hit $6 billion to $6.4 billion.
Gomes Neto noted that supply chain issues impacting planemakers have been improving, although some challenges remain with specific components, and said the firm should get back or very close to three-digit commercial jet production next year.
Sao Paulo-traded shares of Embraer fell more than 2.5% after the quarterly results, but were still up roughly 50% year-to-date.
JPMorgan analysts praised Embraer's results as "solid," highlighting that revenues hit their highest for a first quarter since 2018 and margins trended upwards.
NO NARROWBODY
Embraer, whose commercial portfolio includes regional jets and small narrowbodies, reiterated it has no plans at the moment to develop a larger single-aisle plane to rival the best-selling Boeing 737 and Airbus A320 families.
Earlier this month, the Wall Street Journal reported Embraer was exploring options for a narrowbody jet to break out of its regional niche, where it competes with its E2 family for 90 to 120 passengers, below the Boeing and Airbus's 150-seat-plus market.
Embraer last week played down the report, saying it had no plans for a sizeable cycle of capital expenditures right now.
Gomes Neto said that although he fully understands the excitement over what he dubbed "media speculation," the company is focused on selling and delivering its existing portfolio of products.
"We are now in our harvest season," he said. "We don't have concrete plans to develop or launch a narrowbody or other aircraft in the next few years."
Industry sources say Embraer is trying to walk a fine line between talking up its relevance as a stand-alone planemaker without spooking investors over the cost of an assault on the mainline jet market, a strategy which resulted in its regional competitor Bombardier (OTC:BDRBF) dropping out of the market.
Any future plane developments would probably rely on a partner with deep pockets.
"They are looking for brand awareness and stirring it up to see what comes their way," a senior industry source said.
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