Will Segmental Sales Growth Drive Embraer's Q2 Earnings?

Embraer S.A. (ERJ) is scheduled to release its second-quarter 2025 results on Aug. 5, before market open.

The company has a four-quarter average earnings surprise of 150.60%. The improving revenue performance across three of its major business segments is likely to have boosted Embraer’s overall top-line performance.

Embraer’s Commercial Aviation Sales Likely to Fall

Aircraft deliveries in this segment remained flat year over year (as mentioned in the company’s delivery report published this June), which is likely to have had a neutral impact on its second-quarter sales.

Embraer noted in its first-quarter earnings call that the delivery of its two commercial aircraft was deferred due to unspecified 'commercial issues'. While the company did not provide further details, the prevalence of such delays—ranging from contract negotiations to timing shifts and supply-chain disruption—is expected to have dampened its sales in the quarter, as well.

The Zacks Consensus Estimate for this segment’s revenues is pegged at $551.4 million, which indicates a decline of 0.5% from the year-ago quarter.

Embraer-Empresa Brasileira de Aeronautica Price and EPS Surprise

Embraer-Empresa Brasileira de Aeronautica price-eps-surprise | Embraer-Empresa Brasileira de Aeronautica Quote

Executive Aviation’s Performance

Higher executive jet deliveries, which improved 40.7% year over year in the second quarter, is projected to have bolstered the Executive Aviation segment’s revenue performance.

The Zacks Consensus Estimate for the Executive Aviation segment’s revenues is pegged at $422 million, which indicates growth of 25.6% from the year-ago quarter.

Defense & Security’s Revenues

Revenues generated from the higher number of A-29 Super Tucano aircraft are likely to have bolstered this segment’s sales in the second quarter.

The Zacks Consensus Estimate for this segment’s revenues is pegged at $222 million, which implies an increase of 18.7% from the year-ago quarter.

Services & Support Unit’s Performance

Higher aftermarket aircraft solutions, backed by growing air traffic as well as heightened demand for military jets, are likely to have boosted the segment's revenues in the upcoming quarter. Higher revenues from the ramp-up of MRO activity at its OGMA facility in Portugal for the Pratt & Whitney GTF engines are likely to have also boosted this segment’s top line.

The Zacks Consensus Estimate for this segment’s revenues is pegged at $460.6 million, which indicates growth of 14% from the year-ago quarter.

ERJ’s Q2 Estimates

The robust revenue performance in three of its four major business segments is likely to have bolstered ERJ’s overall top line.

The Zacks Consensus Estimate for ERJ’s second-quarter revenues is pegged at $1.67 billion, which indicates growth of 11.8% from the year-ago quarter’s figure.

Solid sales growth expectations, higher sales volume from executive aviation, favorable product mix and lower costs and expenses are likely to have contributed favorably to the company’s bottom line.

The Zacks Consensus Estimate for ERJ’s earnings is pegged at 47 cents per share. This indicates an increase of 6.8% from the prior-year figure.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for ERJ this time. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as you will see below.

Earnings ESP: Embraer has an Earnings ESP of -1.76%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: ERJ currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks to Consider

Below, we have mentioned a few players from the same sector that have the right combination of elements to beat on earnings in the upcoming releases:

CurtissWright (CW) is set to report its second-quarter 2025 results on Aug. 6, after market close. It has an Earnings ESP of +0.67% and a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for CW’s earnings is pegged at $3.13 per share, indicating year-over-year growth of 17.2%. The consensus estimate for its sales is pegged at $850.5 million, indicating year-over-year growth of 8.4%.

CAE (CAE) is set to report its fiscal first-quarter 2026 results on Aug. 13, before market open. It has an Earnings ESP of +1.03% and a Zacks Rank of 3 at present.

The Zacks Consensus Estimate for CAE’s earnings is pegged at 15 cents per share. The consensus estimate for its sales is pegged at $810.1 million, indicating year-over-year growth of 3.4%.

Transdigm Group (TDG) is set to report fiscal third-quarter earnings on Aug. 5. It has an Earnings ESP of +0.40% and carries a Zacks Rank of 2 at present.

The Zacks Consensus Estimate for TDG’s earnings is pegged at $9.78 per share, indicating year-over-year growth of 8.7%. The consensus estimate for sales is pegged at $2.30 billion, indicating year-over-year growth of 12.2%.

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This article originally published on Zacks Investment Research (zacks.com).

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