Embraer shares tumble after weak third-quarter deliveries
SAO PAULO (Reuters) - Shares of Brazil's Embraer SA (EMBR3.SA) tumbled on Tuesday after the company reported another quarter of weak deliveries, forcing the world's third-largest commercial planemaker into a steep climb to meet its full-year target.
Embraer delivered 19 regional E-Jets to airlines in the third quarter, bringing total commercial deliveries in the first nine months of 2013 to just 58 aircraft. In February, the planemaker forecast 90 to 95 regional jet deliveries this year.
Shares of Embraer fell as much as 5.8 percent in Tuesday trading, their biggest intraday drop in almost three months.
Paulo Cesar de Souza e Silva, Embraer's head of commercial aviation, said at an event last month, "We expect a large number of deliveries in the last quarter (of the year). We have very good visibility of hitting our target for this year."
The year-end challenge raises the stakes in a standoff with a local metalworkers union. A strike last week briefly halted production, and union leaders have threatened to further hamstring operations unless the company hikes wages by 10 percent.
Embraer shares rebounded slightly in afternoon trading to 18.16 reais, down 4.5 percent. The stock is up 33 percent this year, among the top 10 gainers on the benchmark Bovespa stock index .BVSP.
The planemaker's order backlog, reflecting the pipeline of future revenue, rose to a four-year high of $17.8 billion at the end of September from $17.1 billion at the end of June.
International Lease Finance Corp boosted the backlog with a firm order for 50 next-generation E-Jets to start entering service in 2018, converting a letter of intent signed at the Paris Air Show in June.
Embraer also reported delivering 25 executive jets in the third quarter - 21 light jets and four large jets. The executive aviation unit has delivered 52 light jets and 14 large jets in the first three quarters of 2013, well below its year-end target of 80 to 90 light jets and 25 to 30 large jets.
The planemaker's backlog includes demand for its defense and security business, but the company does not report its quarterly deliveries of military aircraft.
(Additional reporting by Roberta Vilas Boas and Silvio Cascione; Editing by Gerald E. McCormick and John Wallace)