Embraer S.A. (NYSE:EMBJ) shares climbed 6.11% in pre-market trading on Monday after the Brazilian aircraft manufacturer delivered second-quarter results well ahead of Wall Street forecasts and raised its profitability and cash flow guidance for 2026.
Adjusted earnings per share reached $1.19, beating the analyst consensus estimate of $0.59 by $0.60. Revenue rose 23% year-on-year to $2.24 billion, comfortably exceeding expectations of $1.95 billion.
The stronger-than-expected performance was accompanied by an improved full-year profit outlook, helping drive the positive reaction in Embraer shares.
Embraer raises 2026 EBIT margin guidance
The company increased its full-year adjusted EBIT margin forecast to between 10.0% and 10.6%, compared with its previous guidance range of 8.7% to 9.3%.
Embraer attributed the upgrade to several factors, including a $68 million extraordinary tax credit, an exemption from direct U.S. import tariffs during the second half of 2026 and an improved outlook across the business.
“The circa $110 million increase in the mid-point of the implied 2026 Adjusted EBIT guidance reflects an extraordinary tax credit, exemption of direct U.S. import tariffs in 2H26, and an improved business outlook,” the company stated.
Adjusted EBIT for the second quarter reached $296.9 million, producing a margin of 13.3%, compared with 10.5% in the corresponding period last year.
Excluding the impact of U.S. tariffs and the extraordinary tax credit, Embraer said its adjusted EBIT margin would have been 10.6%.
Free cash flow forecast doubles
Embraer maintained its full-year revenue guidance of between $8.2 billion and $8.5 billion. The midpoint of $8.35 billion remains slightly below the analyst consensus forecast of $8.549 billion.
However, the company substantially increased its adjusted free cash flow expectations, raising guidance to at least $400 million from its previous forecast of at least $200 million.
Adjusted free cash flow reached $401.0 million during the second quarter, supported by stronger operating performance and the benefit of the extraordinary tax credit.
Aircraft deliveries increase as backlog reaches record
Operational momentum also remained positive, with Embraer delivering 65 aircraft during the quarter, representing a 7% increase from the 61 aircraft delivered in the same period last year.
The latest total consisted of 20 commercial jets and 45 executive jets.
Meanwhile, Embraer’s firm order backlog climbed to an all-time high of $34.5 billion, representing growth of more than 16% year-on-year and providing substantial visibility over future aircraft demand.
The combination of a sizeable earnings beat, 23% revenue growth, improved margin expectations, stronger free cash flow guidance and a record order backlog helped underpin the 6.11% pre-market advance in Embraer shares.
Embraer stock price
