2 Min Read
SAO PAULO (Reuters) - Brazil's Embraer SA (EMBR3.SA), the world's biggest maker of regional jets, posted its weakest quarter for commercial jet deliveries in at least five years on Tuesday, dragging shares to a nine-week low.
Embraer delivered just 14 of its regional E-Jets to airlines in the first quarter, down from 17 aircraft in the first three months of 2013. Commercial jets contribute more than half of the planemaker's revenue and their weakest quarter since at least 2009 offset the slightly stronger performance in Embraer's executive jet division.
Preliminary data also suggest steeper discounts on the E-Jets delivered last quarter, according to Credit Suisse Group analysts, as the negotiations to win big U.S. contracts weighed on profitability.
Embraer shares slid 1.4 percent in Sao Paulo to 18.72 reais on Tuesday, touching their lowest intraday levels since February 11.
Embraer is betting that faint but strengthening signs of a recovery in the global business jet market will help the company remain profitable this year, Chief Executive Frederico Curado said in February.
Business jet deliveries rose to 20 aircraft in the first quarter, from 12 planes a year earlier, due to stronger demand for Embraer's light Phenom 300 jet.
Credit Suisse analysts highlighted the "good quarter" for executive jet deliveries in a Tuesday note to clients, estimating that the profitability of the business jet division would rise 1 to 2 percentage points in 2014 from 2013.
Embraer's backlog of firm orders, a measure of expected revenue, rose to $19.2 billion at the end of March from $18.2 billion at the end of December, boosted by a 50-jet deal with start-up Indian domestic carrier Air Costa.
Embraer did not include details of military aircraft output in its quarterly delivery report.
Reporting by Brad Haynes; Additional reporting by Guillermo Parra-Bernal; Editing by Richard Chang