Embraer SA rallied to a five-year high after announcing an agreement to sell as many as 200 planes for as much as $8.3 billion to SkyWest Inc.
Shares advanced 2.1 percent to 19.29 reais at the close of trading in Sao Paulo, the highest price since February 2008. Trading volume on the shares was 2.7 times the three-month daily average, according to data compiled by Bloomberg. The benchmark Ibovespa gauge rose 1 percent.
The accord comprises 40 firm orders for 76-seat E175 jets, SkyWest said today in a statement. The company also has a conditional purchase agreement for 60 more of the E175 jets pending operating agreements with other airlines, and options for 100 more. Sao Jose dos Campos, Brazil-based Embraer announced on April 29 an $840 million jet sale to United Continental Holdings Inc.
Embraer’s order win is “positive, and could build on the stock’s momentum,” Citigroup Inc. analysts including Stephen Trent wrote in a research note to clients today. “The quick succession of this order activity goes against our negative thesis over the short-term.”
The Brazilian planemaker reported April 12 that first-quarter deliveries fell to 29 planes from 34 a year earlier. Embraer Chief Executive Officer Frederico Curado said in a conference call with analysts on April 30 that orders may accelerate toward the end of the year.
The planemaker received earlier this year an order from Republic Airways Holdings Inc. that may total $4 billion and a $950 million contract to sell jets to the U.S. Air Force.
Today’s advance extends Embraer’s gain this year to 34 percent while the Ibovespa has declined 7.7 percent during the same period.