Embraer SA (EMBR3) sank the most among the world’s biggest planemakers after the Brazilian company said it delivered a larger number of less profitable jets in the third quarter than some analysts had projected.
The shares sank 5 percent to 18.05 reais at 2:16 p.m. in Sao Paulo. A close at that level would be the steepest drop since July 26. It was the worst performer on Brazil’s Ibovespa (IBOV) benchmark, which gained 0.9 percent.
Embraer said in a regulatory filing today that it delivered 19 commercial and 25 executive jets in the third quarter. While the total figure exceeded Itau BBA’s estimate of 41, it was a “poor mix” that included a higher number of executive jets and smaller aircraft that have lower profit margins, according to analysts led by Renato Salomone.
“Embraer will have to deliver 32 to 37 jets in the fourth quarter to meet its guidance of 90 to 95 commercial jets for the year,” the Itau analysts wrote in a note to clients today. “The bottom of the guidance is feasible, although challenging.”
The stock will probably remain “under pressure” on concern Embraer will trail analysts’ revenue and profit estimates when it reports third-quarter earnings on Oct. 31, the analysts wrote.
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