Embraer Q3 Earnings Miss Estimates, Revenues Beat, Outlook Raised

Embraer S.A. EMBJ reported third-quarter 2026 earnings of 40 cents per American Depositary Share (ADS), missing the Zacks Consensus Estimate of 87 cents by 54%. The bottom line declined 37.4% from 64 cents per ADS a year ago.

Embraer’s Total Revenues

Revenues of $2.35 billion increased 17.2% year over year and topped the Zacks Consensus Estimate of $2.3 billion by 2.1%. The revenue increase reflected stronger performance across Services & Support, Defense & Security, Commercial Aviation and Executive Aviation.

Services & Support recorded the highest revenue growth of 30%, followed by Defense & Security at 22%. Commercial Aviation revenues increased 13%, while Executive Aviation revenues improved 12%.

Embraer's Deliveries and Backlog Climb

Embraer delivered 66 aircraft in the quarter, up from 62 a year ago. Commercial Aviation deliveries increased to 22 aircraft from 20, comprising 11 E1 and 11 E2 jets. Executive Aviation deliveries remained unchanged at 41 aircraft, while Defense & Security delivered three aircraft compared with one a year ago.

The company-wide firm order backlog reached a record $35.7 billion, up 14% year over year and 3% sequentially. Commercial Aviation backlog rose 4% to $15.8 billion, Executive Aviation increased 12% to $8.2 billion, Defense & Security climbed 56% to $6.1 billion, and Services & Support advanced 14% to $5.6 billion.

EMBJ’s Q3 Segmental Details

Commercial Aviation: Revenues increased 13% year over year to $696 million, supported by higher volumes and prices. The adjusted EBIT margin improved to 2.4% from 1.3%, primarily aided by supplier compensation.

Executive Aviation: Revenues rose 12% to $655 million, driven by higher prices and favorable product mix. Its adjusted EBIT margin expanded to 16% from 12.1%, reflecting improved gross margins.

Defense & Security: Revenues increased 22% to $341 million, supported by stronger KC-390 revenue recognition associated with higher volumes, customer mix and project stages. Its adjusted EBIT margin improved to 15.7% from 12.9%.

Services & Support: Revenues advanced 30% to $638 million, driven by higher volumes across segments. The adjusted EBIT margin increased to 17% from 13.7%, reflecting operating leverage and the absence of U.S. import tariffs recorded in the prior-year quarter.

Others: This segment includes Agricultural Aviation, the Tempest cyber division, Electronic Equipment and other businesses. Revenues declined 44% to $18 million from $32 million, reflecting lower agricultural aircraft deliveries and reduced sales from Tempest and Electronic Equipment.

Operational Highlights of EMBJ

Embraer's operating income amounted to $242.1 million compared with $159.6 million in the third quarter of 2025, reflecting stronger operating performance across its business segments.

The company posted adjusted EBITDA of $317.1 million compared with $236.3 million a year ago. Its adjusted EBITDA margin expanded to 13.5% from 11.8%.

Financial Update of EMBJ

As of Sept. 30, 2026, EMBJ’s cash and cash equivalents amounted to $1.49 billion compared with $1.95 billion as of Dec. 31, 2025.

Its adjusted free cash flow, excluding Eve, totaled $627.7 million against $300.3 million in the prior-year period, primarily benefiting from stronger sales-related pre-delivery payments and operating performance.

Net cash provided by operating activities during the first nine months of 2026 amounted to $483.5 million compared with $13 million in the corresponding period of 2025.

EMBJ Raises Its 2026 Revenue and Cash Flow Outlook

Embraer continues to expect 80-85 Commercial Aviation deliveries and 160-170 Executive Aviation deliveries in 2026.

The company raised its full-year revenue guidance to $8.4-$8.6 billion from the previous range of $8.2-$8.5 billion. The Zacks Consensus Estimate for revenues is pegged at $8.55 billion, which is higher than the midpoint of the company’s newly guided range.

EMBJ maintained its adjusted EBIT margin guidance of 10-10.6%. It also increased its adjusted free cash flow outlook, excluding Eve, to at least $700 million from the earlier projection of at least $400 million.

EMBJ’s Zacks Rank

Embraer currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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Northrop Grumman Corporation NOC reported third-quarter 2026 adjusted earnings of $7.89 per share, which beat the Zacks Consensus Estimate of $7.22 by 9.3%. The bottom line also increased 2.9% from the year-ago quarter’s level of $7.67.

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This article originally published on Zacks Investment Research (zacks.com).

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