Embraer Soars on $840 Million United Jet Order: Sao Paulo MoverDenyse Godoy
Embraer SA rallied the most among the world’s largest airplane manufacturers after saying it will sell 30 regional jets for about $840 million to United Continental Holdings Inc.
Shares gained 6.6 percent to 17.51 reais at the close of trading in Sao Paulo, the most in three months. It was the second-best performance on the Ibovespa stock benchmark, which added 1.9 percent.
The order announcement is bolstering the shares after an
8.7 percent drop since the Sao Jose dos Campos, Brazil-based planemaker reported April 12 that first-quarter deliveries fell to 29 planes from 34 a year earlier. Net income sank 45 percent to 61.7 million reais ($30.8 million) in the period, the company said yesterday after the market closed.
“Positive news outweighs weak results,” Edigimar Maximiliano, Luiz Pecanha and Andre Mazini, analysts at Banco Bradesco SA’s brokerage unit, wrote in a note to clients today.
Deliveries of the 76-seat E-175 jets for United will begin in 2014, according to the Chicago-based airline. Embraer said yesterday that the carrier has options for 40 more planes.
With this sale, the company’s backlog of orders is about $14.5 billion, up from $12.5 billion in the fourth quarter of 2012 and compared with $14.7 billion in the first quarter of 2012, Maximiliano, Pecanha and Mazini wrote in the note.
Embraer Chief Executive Officer Frederico Curado said in a conference call today with analysts that orders may accelerate toward the end of the year.
The planemaker earlier this year announced 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.