Embraer-Empresa Brasileira de Aeronautica NYSE: EMBJ reported what President and CEO Francisco Gomes Neto called the company’s strongest first quarter revenue in its history, alongside the highest first-quarter aircraft deliveries in a decade and another record backlog.
On the company’s first quarter 2026 earnings call, Gomes Neto said Embraer delivered 44 aircraft during the quarter, including 10 commercial jets, 29 executive jets and five defense aircraft. He said total deliveries rose nearly 50% year over year, with commercial aviation deliveries up 43% and executive aviation deliveries up 26%.
“We continue to see tangible progress in production leveling and greater stability across our assembly lines,” Gomes Neto said. He added that the second quarter had “a great start,” citing a purchase agreement signed by the United Arab Emirates for 10 C-390 aircraft plus 10 options.
Backlog Reaches Another Record
Gomes Neto said Embraer’s backlog reached 32 billion in the quarter, up 22% year over year, marking a historical record for the sixth consecutive time. Commercial aviation backlog reached 15 billion, up 50% from a year earlier, with a book-to-bill ratio of three over the past 12 months.
Backlog across Executive Aviation, Defense & Security and Services & Support totaled 17.1 billion, up mid-single digits year over year. Gomes Neto said Embraer also has approximately 20 billion in options, which could expand the backlog beyond 50 billion over time if exercised.
The company highlighted several commercial and defense wins during the quarter, including an order from Finnair for 18 E195-E2 jets and momentum for the C-390 and A-29 platforms. Gomes Neto also noted a new partnership with Northrop Grumman for the U.S. NGAS program.
Revenue Growth Across Segments
Chief Financial Officer Felipe Santana said consolidated net revenue increased 31% year over year to $1.4 billion, representing 17% of the midpoint of the company’s guidance and two points above the five-year historical average.
- Commercial Aviation: Revenue rose 45% to $293 million, driven by higher deliveries and pricing. Adjusted EBIT was negative $28 million, with a negative 9.7% margin, which Santana attributed to client mix, logistics costs and the absence of supplier credits recorded last year.
- Executive Aviation: Revenue increased nearly 30% to $480 million, reflecting strong demand and favorable product mix. Adjusted EBIT reached $25 million, with a 6% margin. Santana said margins were affected by U.S. import tariffs, client mix and higher selling expenses tied to the launch of the Praetor 500E and Praetor 600E.
- Defense & Security: Revenue increased 62% to $227 million. Adjusted EBIT was $38 million, with a 17% margin, supported by higher KC-390 revenue recognition, increased A-29 production and positive one-time items.
- Services & Support: Revenue reached $490 million, while adjusted EBIT totaled $70 million, with a 14.3% margin.
Santana said adjusted EBIT at the consolidated level was $94 million, with a 6.5% margin, up 1 point year over year and 7.7 points above the five-year average. Adjusted free cash flow excluding Eve was negative $447 million, which he said reflected preparation for higher aircraft deliveries in coming quarters.
Tariffs, Logistics Costs and Guidance
Executives said Embraer remains comfortable with the midpoint of its 2026 guidance but is taking a conservative approach because of uncertainty around tariffs and broader market conditions.
Santana said tariff impacts totaled $13 million in the first quarter, mainly related to inventory effects, and that another $11 million in inventory impact is expected in the second quarter. Gui Paiva, head of investor relations, M&A and venture capital, said that if the current status quo continues and tariffs are not implemented on Brazil and Embraer, the company estimates it could see an additional 60 basis points for the year.
In response to an analyst question about commercial aviation margins, Santana said logistics costs had a $7 million impact in the first quarter and were “much more” of a one-time item. He said Embraer does not foresee the same impact in coming quarters.
Paiva also addressed a one-time benefit in Defense & Security, saying Embraer booked a benefit tied to an amendment to a client contract that was calculated retroactively to the start of the contract.
Demand Remains Firm Despite Fuel and Geopolitical Concerns
Asked about the impact of rising oil prices and conflict involving Iran, Gomes Neto said Embraer is monitoring the situation closely. He said higher costs may affect airline fleet expansion and renewal plans, but Embraer has not seen a direct impact.
“We don’t see any diminishing interest in new campaigns or any movement to delay deliveries,” Gomes Neto said.
He said the E2 family is well positioned in an environment where fuel efficiency is a priority, calling it “the most efficient aircraft” in its small narrow-body segment. Gomes Neto said Embraer is “cautiously optimistic” about new E2 campaigns.
On business jets, Gomes Neto said demand remains strong and that the newly launched Praetor 500E and Praetor 600E are “selling very well.” Paiva said tariffs have affected costs for executive jets, but Embraer believes its products remain competitive even after price adjustments.
Production Ramp and Long-Term Investment Plans
Gomes Neto said Embraer is improving production leveling, particularly in executive jets, where production is now “almost” at the desired level. Commercial jet production remains more challenging due to supplier constraints, but he said the company expects further improvement in 2027 and 2028.
For 2026, Gomes Neto said Embraer does not see risk to its guidance of 85 commercial jets and between 160 and 170 business jets. Longer term, he said the company expects to reach production of 120 commercial jets, 200 executive jets and 10 KC-390 aircraft by the end of the decade.
Santana said Embraer is investing to increase production at its Melbourne facility, expand its MRO footprint in Texas and support OGMA’s production growth for the KC-390 and GTF programs. Gomes Neto added that the company is also investing in new technologies to prepare for a future product cycle.
In defense, Gomes Neto said the UAE C-390 order opens opportunities in the Middle East, with deliveries expected to start in 2028. He said Embraer is also pursuing major opportunities in India and the United States, both of which could require local assembly if Embraer wins significant orders.
Gomes Neto also gave a brief update on Eve, saying the eVTOL prototype had completed more than 54 flights year to date, with a total of two hours and 17 minutes of flight time, and that the taxi campaign is transitioning toward horizontal flights in the second quarter.
About Embraer-Empresa Brasileira de Aeronautica NYSE: EMBJ
Embraer SA NYSE: EMBJ, legally known as Embraer – Empresa Brasileira de Aeronáutica SA, is a global aerospace company headquartered in São José dos Campos, Brazil. The company designs, develops, manufactures and sells commercial, executive, defence and agricultural aircraft. Embraer’s product portfolio includes the popular E-Jets family for regional and short-haul carriers, the advanced E2 series, a range of business jets under the Phenom, Legacy and Praetor brands, the A-29 Super Tucano military trainer and light attack aircraft, the C-390 Millennium multi-mission transport platform, and the Ipanema agricultural aircraft.
Embraer’s commercial aviation segment focuses on regional airlines and air taxi operators, offering aircraft that seat between 70 and 150 passengers.
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