Embraer S.A.: Company Strategy & Performance Analysis

Embraer S.A (Embraer) is one of the leading manufacturers of aircraft. The company designs, develops, manufactures and markets commercial, executive, defense and agricultural aircraft. It mainly produces jets and executive jets in the entry-level, light, ultra-large and mid-light/mid-size categories, including the Phenom 100/300 family, the Lineage 1000 and the Legacy 450/500 family. It also provides after sales support and maintenance services to customers worldwide. The company also offers integrated solutions and systems for the defense and security industry.

MarketLine Premium’s company strategy reports provide in-depth coverage of the performance and strategies of the world’s leading Civil Aerospace companies. The report details company operations in key geographies and offers a comprehensive analysis of each firm’s growth strategy and financial performance. The reports benchmark company performance via key indicators, including order, order backlog, operating expense, operating income, net income, and deliveries.

Key Highlights

Strong order backlog to drive company’s growth

Embraer posted a high order backlog of US$19.6 billion in 2016. Its order backlog increased at 12.0% from US$12.4 billion in 2012 to US$19.6 billion in 2016. However, the company’s order backlog decreased 12.6% in 2016, as compared to US$22.4 billion in 2015. The Commercial Aviation division order backlog increased 24.9% from 185 aircraft in 2012 to 450 aircraft in 2016 owing to the increase in demand of Embraer 170/190 jets from various airline operators, including Skywest, American Airlines, United, JetBlue, Alaska and Air France-KLM.

Increasing number of deliveries to improve market presence

Embraer ranks sixth in terms of deliveries and seventh in terms of revenue. In 2016, the company reported 225 deliveries and posted a revenue of US$5,257.5 million from the Civil Aerospace segment. Its deliveries increased from 205 in 2012 to 225 in 2016, which is mainly attributed to its increase in the number of contracts.

The revenue and net profit margin of the company were higher in last quarter of previous year

The revenue of the company increased from US$1,309.0 million in the first quarter of 2016 to US$2,027.8 million in the fourth quarter of 2016. However the revenue showed a sharp decline from the fourth quarter of 2016 to first quarter of 2017 to US$1,026.3 million in the first quarter of 2017, before increasing to US$1,769.6 million in the second quarter of 2017. The net profit margin of the company increased from -0.1% in the first quarter of 2016 to 10.3% in the fourth quarter of 2016. The company witnessed a 2.3% net profit decline in the first quarter of 2017 before increasing to 7.0% in the second quarter of 2017.

Scope

– Company Snapshot Details key indicators and rankings of Embraer S.A. in terms of revenue, net income, and operating income.

– Company SWOT Analysis Outlines Embraer S.A.’s strengths, weaknesses, and opportunities and threats facing the company.

– Growth Strategies Provides an overview of Embraer S.A.’s corporate goals and strategic initiatives and evaluates their outcomes.

– Company Performance and Competitive Landscape Analyses the company’s performance by geographical segment and provides a peer comparison on parameters such as revenue and market share.

– Key Developments Showcases Embraer S.A.’s recent corporate events and initiatives.

– ICT Spending Prediction Details how the company allocates its ICT budget across the core areas of its business, specifically hardware, software, IT services, communications and consulting.

Reasons to buy

- How does Embraer S.A. rank among its peers in terms of revenue and market share?

- What are Embraer S.A.’s main growth strategies and how successful has the company been at implementing them?

- How has the company performed since 2014?

- How has Embraer S.A. performed in comparison to its main competitors?

- What are Embraer S.A.’s strengths and weaknesses and what opportunities and threats does it face?

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