Strong Dollar Weighs on Embraer’s 3Q Income
Embraer pegs the bulk of its revenues to the dollar, but costs are pegged to the Brazilian real.

Despite citing a third-quarter net income loss caused by higher income tax exposure and an appreciating U.S. dollar, Embraer CFO Jose Antonio De Almeida Filippo was confident that a seasonal increase in fourth-quarter deliveries will help the company to meet forecast performance this year. The company’s firm order book, which stands at a record $22.1 billion, up from $18.1 billion in the second quarter, lends credence to Filippo’s optimism. In the first nine months, revenues totaled $4.2 billion, a 7.9-percent year-over-year gain. However, overall revenue for the third quarter declined 3.8 percent from a year ago.

Embraer pegs the bulk of its revenues to the dollar, but costs are pegged to the Brazilian real. “We’ve had an 11-percent appreciation of the dollar to the real this quarter and that explains a lot,” Filippo said.