UPDATE 2-Embraer sees U.S., Europe lifting business jets next year
(Recasts with outlook, adds comments by CEO)
By Brad Haynes
SAO PAULO Nov 6 (Reuters) - Brazilian planemaker Embraer SA could miss a delivery target for larger business jets this year, but new models and stronger demand in Europe and the United States should boost private jet sales next year.
Chief Executive Frederico Curado told analysts on a Thursday earnings call that strong interest in the new mid-size Legacy 500 should generate firm orders in the next few months, and a recovery in developed economies was brightening prospects.
"On business jets, we see some reduction of activity in Brazil and China, but on the other hand we are seeing an increasing level of activity in Europe, believe it or not, and the United States," Curado said.
That should boost sales of Embraer's growing private jet portfolio, which skewed to smaller, less-profitable models in the third quarter, leading to an operating loss in the segment.
Embraer posted a quarterly net loss of $11 million on Thursday, hurt by weak commercial and executive jet sales and a rising tax bill. Curado reiterated that strong year-end deliveries would help the company hit 2014 revenue and profit margin targets as they have in recent years.
Third-quarter results fell from a $53 million profit a year earlier, missing an average forecast for a profit of $49 million in a Reuters survey of analysts.
The defense segment surged to 28 percent of Embraer's revenue in the quarter and Curado said the division could surpass its 2014 revenue target, making up for executive aviation revenue at the lower end of the official forecast. Continuación...