* Shares lose over 5 pct, worst session in a year
* CEO sees economic concern sapping Legacy demand in China
(Adds details from earnings, updates share price)
By Brad Haynes and Roberta Vilas Boas
SAO PAULO, July 26 Shares of Brazilian
planemaker Embraer SA faced their worst session in a
year on Friday, after executives warned that economic concerns
seemed to be weakening demand for bigger business jets.
The stock dropped as much as 5.6 percent in Sao Paulo
trading, giving back its gains this month as investors took
profits on its more than 50 percent rise this year.
Chief Executive Frederico Curado said Embraer's private jet
division was on track to hit the lower end of its 2013 delivery
and revenue targets as it faced softer demand for the Legacy 650
business jets in the "super mid-size" segment.
"There is overall some macroeconomic concern that there may
be some bumps ahead. The executive jet segment is very sensitive
to that," Curado told analysts on a call to discuss earnings.
Questions about deliveries in the second half led management
to maintain their profitability forecasts for the year despite a
currency swing that eased local labor costs, said Chief
Financial Officer Jose Antonio Filippo.
The 10 percent depreciation of Brazil's currency, the real
, also drove up Embraer's tax liabilities, triggering an
unexpected net loss for the second quarter.
The late Thursday earnings and executives' cautious tone
took the steam out of Embraer's stock, which is the best
performer on the Bovespa stock index this year.
Curado said it was still too early to tell whether softness
in its executive jet division was due to stiff competition or
slumping demand, adding that geographic trends were mixed.
"We saw stronger demand last year from China, for example,
than we are seeing this year," he said. Embraer has bet big on
the Legacy 650 in China, where it set up a joint venture to
manufacture the aircraft.
Curado said the Legacy jets are also underperforming in the
U.S. market, where corporate profits have hit record highs but
Embraer's market share in the segment lags other regions.
(Editing by Gerald E. McCormick, Nick Zieminski and Chris