Embraer cuts full year revenue outlook on lower executive jet deliveries

Embraer reported (29-Jul-2016) it is revising its full year guidance for 2016, due to business conditions in the executive jets industry proving to be "more difficult than expected thus far in 2016, with continued pressure on new jet sales from high levels of used jet inventories and a highly competitive environment". Key outlook considerations:

• Outlook for the Commercial Aviation and Defense & Security segments, in terms of revenue and delivery expectations, remain unchanged. Embraer expects to deliver 105-110 commercial aircraft in 2016, generating USD3.45-3.65 billion in revenue;
• Embraer has cut its 2016 executive jet delivery targets from 75-85 to 70-80 light jets and from 40-50 to 35-45 large jets, and cut Executive Jets revenue expectations from USD1.75-1.9 billion to USD1.60-1.75 billion;
• With this impact combined with a USD50 million revenue reduction in the 'Other' businesses segment as a result of a challenging business environment in Brazil, consolidated revenues for the year are now expected to stay within the range of USD5.8-6.2 billion, a reduction from the previous range of US6.0-USD6.4 billion;
• Free cash flow usage is revised from no more than USD100 million, to no more than USD400 million, due to expectations that the company will to carry additional finished goods inventory into 2017. [more - original PR]