Despite Increase in Sales Brazil Embraer’s Revenues Fall in Second Quarter

Embraer 190, a Brazilian jet
Brazilian aircraft maker Embraer,  the world's leading manufacturer of commercial jets with up to 120 seats, recorded net sales of US$ 1,456.6 million in the second quarter 2009 (2Q09), and net income of US$ 67.8 million, equivalent to diluted earnings per ADS of US$ 0.3750.

In 2Q09, Embraer delivered 56 jets to the commercial aviation, executive aviation and defense segments, compared to 52 jet deliveries in the second quarter of 2008 (2Q08).

The Company's firm order backlog on June 30, 2009, remained stable compared to the previous quarter, totaling US$ 19.8 billion. The backlog of the EMBRAER 170/190 family accumulated a total of 882 firm orders and 794 options, with 328 aircraft to be delivered.

Despite a higher number of deliveries, net revenues for 2Q09 totaled US$ 1,456.6 million, or a 10.9% decrease from the US$ 1,635.0 million in net revenues of 2Q08, basically due to a different product mix in 2Q09, also including 15 Phenom 100 jet deliveries.

The gross margin for 2Q09 totaled 23.1%, or an increase over the 21.9% gross margin of 2Q08, mainly due to productivity gains achieved through the P3E program, widely commented on by the Company.

Income from operations totaled US$ 174.6 million in 2Q09 or 54.2% more than US$ 113.2 million recorded for the same period last year. The increase is due to the higher gross margin in the quarter, and also to decreased operating expenses, both attributable to productivity gains and a strong control over the Company's cost structure.

The operating margin was 12.0% in 2Q09, or an increase over the 6.9% operating margin for 2Q08.

After US$ 63.4 million in income tax expense, Embraer's net income was US$ 67.8 million in 2Q09, compared to a net income of US$ 134.4 million in 2Q08. The net margin was 4.7% in 2Q09, compared to 8.2% in 2Q08.

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