{"id":226815,"date":"2025-05-06T13:37:09","date_gmt":"2025-05-06T13:37:09","guid":{"rendered":"https:\/\/peraltafinancing.com\/airbus\/embraer-downplays-tariff-impact-on-2025-results\/"},"modified":"2025-05-06T13:37:09","modified_gmt":"2025-05-06T13:37:09","slug":"embraer-downplays-tariff-impact-on-2025-results","status":"publish","type":"post","link":"https:\/\/fivemor.com\/?p=226815","title":{"rendered":"Embraer downplays tariff impact on 2025 results"},"content":{"rendered":"


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May 6, 2025, \u00a9 Leeham News: <\/strong>Embraer<\/a> CEO Francisco Gomes Neto sought to reassure investors on Tuesday, emphasizing the limited effect of new U.S. tariffs<\/a> on the company\u2019s operations as its Q1 2025 results were published.<\/p>\n

\"\"<\/a><\/p>\n

\u201cOur initial analysis points towards limited impact and we remain confident in and reiterate our 2025 guidance,\u201d Gomes Neto said. He added that the company is \u201cworking on initiatives to limit impact of U.S. tariffs on our business.\u201d<\/p>\n

Gomes Neto credited the resilience in part to its high U.S. content, with Embraer aircraft incorporating substantial American-sourced components and systems\u2014a factor that helps blunt the impact of cross-border tariffs.<\/p>\n

But he added: \u201cWe join other companies in calling for a return to zero tariffs\u2026 for a highly globalised industry.\u201d<\/p>\n

Strongest first quarter since 2016<\/strong><\/h5>\n

The Brazilian planemaker posted $1.1 billion in Q1 2025 revenue, its strongest first quarter since 2016, and a 23% increase year-over-year\u2014though this was slightly below market consensus for the period.<\/p>\n

Embraer also strengthened its balance sheet in Q1 through a $650 million 10-year bond issuance. The company extended its average debt maturity to 6.3 years, with net debt-to-EBITDA improving to 0.5x, down from 1.8x a year earlier.<\/p>\n

The company\u2019s firm order backlog rose to $26.4 billion, surpassing the record set in the prior quarter.<\/p>\n

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Deliveries and backlog. Embraer delivered 30 jets in 1Q25, of which 7 were commercial jets (3 E2s and 4 E1s) and 23 were executive jets (14 light and 9 medium); +20% versus the 25 aircraft delivered yoy. The number of deliveries for Executive Aviation was 28% higher compared to 1Q24, while Commercial Aviation was flat. There were no deliveries for Defense & Security. Credit: Embraer.<\/strong><\/p>\n<\/div>\n

Antonio Carlos Garcia, executive vice president and CFO, told investors the \u201cgreat results\u201d included the \u201cbest first quarter [revenue] results of the last nine years.\u201d<\/p>\n

On tariffs, Garcia said the \u201cinitial estimate is that it could negatively impact our EBIT margin by 90 basis points\u201d for the next three quarters.<\/p>\n

He added that the company was implementing \u201cadditional cost reduction measures\u201d to mitigate the potential hit from higher tariffs, but \u201cfor now we remain confident we can deliver our guidance for 2025.\u201d<\/p>\n

Asked whether there was any evidence of U.S airlines shying away from the E175 (American placed a firm order with Embraer for 90 E175s, with purchase rights for 43 additional jets, in 2024) as a result of the tariffs, Neto told analysts: \u201cWe still don\u2019t know everything,\u201d before adding that the 90 basis point hit was \u201chighly concentrated in executive aviation and services and support.\u201d<\/p>\n

Embraer is making operational changes to reduce specifically the exposure of the Phenom and Praetor aircraft lines to the tariffs.<\/p>\n

Deliveries up<\/strong><\/h5>\n

Embraer delivered 30 aircraft in the quarter, up from 25 a year earlier, including seven commercial jets and 23 executive jets. Growth was particularly strong in Defense & Security, which saw revenue surge 72% year-over-year.<\/p>\n

Embraer\u2019s Q1 was marked by key program successes, including a new order from All Nippon Airways (ANA) for the E-Jet family, amounting to 15 E190-E2s, the launch of Helvetic Airways\u2019 E195-E2 operations at London City Airport\u2014the largest jet to use the airport\u2014and continued international traction for the KC-390 Millennium, with additional sales to European defense customers.<\/p>\n

Adjusted EBIT rose to $62 million with a margin of 5.6%, up from 0.8% in Q1 2024. Despite reporting negative free cash flow of $385.8 million (excluding Eve Holdings), the company attributed the dip to planned inventory buildup ahead of higher deliveries expected later in the year.<\/p>\n

The company reaffirmed its full-year 2025 guidance, which includes delivery targets of 77 to 85 commercial aircraft and 145 to 155 executive jets.<\/p>\n

Revenue is forecast between $7.0 billion and $7.5 billion, with adjusted EBIT margins of 7.5% to 8.3% and at least $200 million in free cash flow.<\/p>\n

Breaking the duopoly\u00a0<\/strong><\/h5>\n

Commenting on speculation in the recent past that Embraer could seek to challenge the Boeing-Airbus duopoly with an expansion of its product line, Neto said: \u201cWe are very focused on selling the E2s and we are working and investing in new technologies to be prepared for new products in the future, which could be a bigger executive jet or a bigger commercial jet.\u201d<\/p>\n

These technologies include the areas of autonomous flight, and new fuselage, wing and flight deck systems and materials. \u201cWe don\u2019t have any concrete decision to go this way or that way,\u201d he added.<\/p>\n

He said the scoping work would \u201callow us to decide about a new product in the future. At this point in time we are really focused on selling the aircraft that we have.\u201d<\/p>\n

Related<\/em><\/h3>\n<\/p>\n

\n<\/div>\n\n","protected":false},"excerpt":{"rendered":"

May 6, 2025, \u00a9 Leeham News: Embraer CEO Francisco Gomes Neto sought to reassure investors on Tuesday, emphasizing the limited effect of new U.S. tariffs on the company\u2019s operations as its Q1 2025 results were published. \u201cOur initial analysis points towards limited impact and we remain confident in and reiterate our 2025 guidance,\u201d Gomes Neto […]<\/p>\n","protected":false},"author":1,"featured_media":113573,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[12027],"tags":[82767,30943,4197,4955,11677],"dealstore":[],"offerexpiration":[],"class_list":["post-226815","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-airbus","tag-downplays","tag-embraer","tag-impact","tag-results","tag-tariff"],"yoast_head":"\nEmbraer downplays tariff impact on 2025 results - Som2ny Network<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fivemor.com\/?p=226815\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Embraer downplays tariff impact on 2025 results - 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