Embraer increased deliveries 88% quarter on quarter in 2Q24 and backlog totaled US$21.1bn - a 7-year high

Rhea-AI Summary

Embraer (NYSE: ERJ) reported strong performance in Q2 2024, with total deliveries increasing 88% quarter-on-quarter to 47 jets. The company's backlog reached a 7-year high of $21.1 billion, up more than 20% year-over-year. Commercial Aviation led growth with a 170% increase in deliveries compared to Q1. Executive Jets also showed solid performance, delivering 27 aircraft.

Key highlights include:

• Commercial Aviation backlog of $11.3 billion, boosted by a 20 E2 jet order from Mexicana de Aviación
• Delivery of the 1,800th E-Jet
• Executive Jets maintaining a positive book-to-bill ratio
• Delivery of the 2nd C-390 Millennium to the Portuguese Air Force

Embraer's 2024 guidance remains at 197-215 total deliveries across all segments.

Positive

• Total deliveries increased 88% quarter-on-quarter to 47 jets in Q2 2024
• Company-wide backlog reached $21.1 billion, up more than 20% year-over-year
• Commercial Aviation deliveries grew by 170% compared to Q1 2024
• Secured a 20 E2 jet order from Mexicana de Aviación
• Executive Jets maintained a positive book-to-bill ratio
• Delivered the 1,800th E-Jet, a significant milestone for the company

Negative

• Defense & Security backlog decreased by 10% quarter-on-quarter to $2.1 billion

Financial Analyst

Embraer's remarkable increase in deliveries for Q2 2024 signals a strong rebound in both its commercial and executive jet segments. The company delivered 47 jets this quarter, an increase of 88% from the prior quarter, demonstrating efficient production capacity and improved market demand. Particularly noteworthy is the 170% quarter-over-quarter growth in commercial aviation segments, offsetting stagnation in other divisions.

The backlog surge to $21.1 billion, a seven-year high, emphasizes the company's robust market position and future revenue stability. The major contributor to this backlog growth was commercial aviation, bolstered by a significant order of 20 E2 jets from Mexicana de Aviación, which could further propel Embraer's market share in the regional jet space.

Short-term, investors might see positive market reactions due to heightened delivery numbers and backlog figures. However, it's essential to consider potential supply chain disruptions and geopolitical risks that could affect future production and profitability. Long-term, the backlog ensures a steady revenue stream, yet competitiveness in the aerospace sector means continuous innovation and market adaptation are important for sustained growth.

Market Research Analyst

Embraer's performance in Q2 2024 demonstrates not only operational excellence but also strategic market positioning. The substantial growth in commercial aviation deliveries and the backlog signals strong demand recovery post-pandemic and effective targeting of key markets. With the firm order from Mexicana de Aviación and the delivery to Scoot, Embraer is strategically capturing opportunities in both established and emerging markets.

The defense segment's backlog decline by 10% may raise concerns. However, the ongoing deliveries to the Portuguese Air Force and potential future orders from other European countries provide a growth opportunity. This dual focus on commercial and defense sectors diversifies risk and provides a hedge against downturns in either market.

In executive aviation, maintaining a high book-to-bill ratio indicates sustained demand and effective sales strategies. This segment's marginal backlog increase suggests stability, though investors should watch for growth opportunities outside traditional markets to ensure expanded market presence.

For retail investors, understanding these dynamics can highlight Embraer's strong positioning and potential growth areas, although vigilance on global market conditions and competitive actions remains essential.

Aerospace Industry Analyst

The achievements in Q2 2024 reflect Embraer's resilient adaptability within the aerospace industry. The significant increase in both commercial and executive jet deliveries illustrates operational efficiency and successful market penetration. The landmark backlog of $21.1 billion underscores future revenue assurance while reflecting robust order intake and customer confidence.

The E2 jet's order by Mexicana de Aviación is particularly telling. This move not only strengthens Embraer's presence in the Latin American market but also reinforces its competitive stance against industry giants like Boeing and Airbus in the regional jet segment. Deliveries to Scoot and Royal Jordanian Airlines further emphasize Embraer's global reach and market agility.

On the defense front, while the slight decline in backlog might concern some investors, the delivery of the C-390 Millennium to Portugal and potential future European orders represent significant growth avenues. This segment's performance should be monitored closely as it can substantially impact Embraer's overall market position.

For retail investors, these developments suggest a balanced mix of steady revenue streams and potential growth areas, positioning Embraer as a noteworthy contender in the aerospace industry.

• Commercial deliveries soared circa 170% sequentially while Executive Jets grew 50%
• US$21.1 bn company wide backlog up more than 20% annually
• 20 E2 jets order from Mexicana de Aviación
• 2^nd C-390 Millennium aircraft delivered to Portugal

SÃO PAULO, July 18, 2024 /PRNewswire/ -- Embraer (NYSE: ERJ; B3: EMBR3) delivered 47 jets in 2Q24, an 88% increase compared to the previous quarter (qoq), when 25 jets were delivered. The company's overall backlog ended at US$21.1 billion, more than 20% higher annually (yoy) and a 7-year high. Commercial Aviation was the highlight of the quarter with 19 jets deliveries – or circa 170% more qoq (7 jets in 1Q24). Meanwhile, Executive Jets delivered a solid performance with 27 aircraft (18 in 1Q24) while Defense delivered one multi-mission airlift C-390 Millennium.

Deliveries by Segment	2Q24	1Q24	2Q23	1H24	1H23	2024 Guidance
Executive Aviation	27	18	30	45	38	125-135
Phenom 100	2	1	1	3	3
Phenom 300	18	10	18	28	22
Light Jets	20	11	19	31	25
Praetor 500	3	3	6	6	6
Praetor 600	4	4	5	8	7
Medium Jets	7	7	11	14	13
Commercial Aviation	19	7	17	26	24	72-80
E195-E2	7	4	7	11	12
E190-E2	4	-	-	4	-
E175	8	3	10	11	12
Total	46	25	47	71	62	197-215*
Defense & Security	1	-	1	1	1
C-390 Millennium	1	-	1	1	1

The company wide backlog reached US$21.1 billion in 2Q24 (or more than 20% higher yoy and marginally higher qoq). The biggest increase happened in Commercial Aviation (+US$227 million) while the biggest decreased occurred in Defense & Security (-US$251 million). The backlog for the other two businesses units increased marginally (+US$45 million).

Backlog by Segment - US$bn	2Q24	1Q24	qoq	2Q23	yoy
Commercial Aviation	11.3	11.1	2 %	8.0	40 %
Executive Jets	4.6	4.6	1 %	4.3	8 %
Services & Support	3.1	3.1	0 %	2.7	16 %
Defense & Security	2.1	2.4	-10 %	2.3	-5 %
Total	21.1	21.1	0 %	17.3	22 %

In Commercial Aviation, the backlog reached US$11.3 billion in 2Q24 (+2% qoq). The main highlight of the period was the order for 20 E2 jets by Mexicana de Aviación – Mexico's state-owned airline. The order includes 10 E190-E2 jets and another 10 E195-E2 jets, with deliveries scheduled to start in 2Q25. Other highlights were the delivery and start of operations of the first E190-E2 to Scoot – the low-cost subsidiary of Singapore Airlines (SIA). Furthermore, Embraer reached another important milestone: the delivery of its 1,800^th E-Jet in May. The marquee aircraft was delivered to the leasing company Azorra and it will be operated by Royal Jordanian Airlines.

2Q24 Backlog - Commercial Aviation
Aircraft Type	Firm Orders	Deliveries	Firm Order Backlog
E195-E2	282	100	182
E190-E2	44	23	21
E175	943	764	179
Total	1,269	887	382

Executive Jets continued to seize great sales momentum in both fleet and retail markets, demonstrating solid delivery performance and maintaining a positive book-to-bill ratio. The backlog ended the period marginally up at US$ 4.6 billion in 2Q24 (+1% qoq).

The Services & Support unit continues to be one of the main drivers of Embraer's growth through a combination of operational excellence, customer experience and innovative solutions. Its backlog ended 2Q24 roughly unchanged at US$3.1 billion.

In Defense & Security, the highlight was the delivery of the 2^nd C-390 Millennium to the Portuguese Air Force (FAP), in a ceremony held in Gavião Peixoto (SP), Brazil. In 2019, FAP ordered 5 KC-390s, including a comprehensive services and support package and a flight simulator. The 1^st aircraft entered service in October 2023 at Beja Air Base. The selection of the C-390 by some countries in Europe has not yet been incorporated into the backlog, which represents a significant source of potential growth for the coming quarters. The backlog in Defense & Security decreased 10% qoq and reached US$2.1 billion in 2Q24.

Commercial Aviation aircraft backlog:

Customer (Country)	Firm Orders	Delivered	Firm Order Backlog
Embraer 195-E2	282	100	182
Azul (Brazil)	51	-	51
Porter (Canada)	75	36	39
Aercap (Ireland)	45	19	26
Azorra (USA)	23	5	18
Mexicana (Mexico)	10	-	10
Aircastle (USA)	23	14	9
Air Peace (Nigeria)	13	5	8
Binter Canarias (Spain)	16	10	6
Salam Air (Oman)	6	-	6
Luxair (Luxembourg)	4	-	4
ICBC (China)	10	7	3
Royal Jordanian (Jordanian)	2	-	2
Helvetic (Switzerland)	4	4	-

 

Customer (Country)	Firm Orders	Delivered	Firm Order Backlog
Embraer 190-E2	44	23	21
Mexicana (Mexico)	10	-	10
Azorra (USA)	12	4	8
Aircastle (USA)	2	-	2
Air Kiribati (Kiribati)	2	1	1
Aercap (Ireland)	5	5	-
Helvetic (Switzerland)	8	8	-
Wideroe (Norway)	3	3	-
Placar Linhas Aéreas (Brazil)	1	1	-
Undisclosed	1	1	-

 

Customer (Country)	Firm Orders	Delivered	Firm Order Backlog
EMBRAER 175	943	764	179
American Airlines (USA)	204	108	96
Republic Airlines (USA)	187	141	46
Skywest (USA)	228	207	21
Horizon Air / Alaska (USA)	50	44	6
Air Peace (Nigeria)	5	-	5
Undisclosed	4	-	4
Overland Airways (Nigeria)	3	2	1
Air Canada (Canada)	15	15	-
Air Lease (USA)	8	8	-
Alitalia (Italy)	2	2	-
Belavia (Belarus)	1	1	-
CIT (USA)	4	4	-
ECC Leasing (Ireland)*	1	1	-
Flybe (UK)	11	11	-
Fuji Dream (Japan)	2	2	-
GECAS (USA)	5	5	-
KLM (The Netherlands)	17	17	-
LOT Polish (Poland)	12	12	-
Mauritania Airlines (Mauritania)	2	2	-
Mesa (USA)	7	7	-
NAC / Aldus (Ireland)	2	2	-
NAC / Jetscape (USA)	4	4	-
Northwest (USA)	36	36	-
Oman Air (Oman)	5	5	-
Royal Jordanian (Jordan)	2	2	-
Suzuyo (Japan)	11	11	-
TRIP (Brazil)	5	5	-
United Airlines (USA)	110	110	-
* Aircraft delivered by ECC Leasing: one to Air Caraibes

View original content:https://www.prnewswire.com/news-releases/embraer-increased-deliveries-88-quarter-on-quarter-in-2q24--and-backlog-totaled-us21-1bn--a-7-year-high-302201288.html

SOURCE Embraer S.A.

FAQ

How many jets did Embraer (ERJ) deliver in Q2 2024?

Embraer delivered 47 jets in Q2 2024, an 88% increase compared to the previous quarter.

What was Embraer's (ERJ) backlog value at the end of Q2 2024?

Embraer's overall backlog reached $21.1 billion at the end of Q2 2024, a 7-year high for the company.

How many E2 jets did Mexicana de Aviación order from Embraer (ERJ) in Q2 2024?

Mexicana de Aviación ordered 20 E2 jets from Embraer in Q2 2024, including 10 E190-E2 and 10 E195-E2 aircraft.

What was the percentage increase in Embraer's (ERJ) Commercial Aviation deliveries in Q2 2024?

Embraer's Commercial Aviation deliveries increased by approximately 170% quarter-on-quarter in Q2 2024.

How many C-390 Millennium aircraft has Embraer (ERJ) delivered to Portugal as of Q2 2024?

Embraer has delivered 2 C-390 Millennium aircraft to the Portuguese Air Force as of Q2 2024.