Embraer posts loss on staff buyouts, writedowns

Embraer SA, the world's third-largest commercial jet producer, on Monday posted a $34 million net loss due to the cost of staff cuts, used aircraft writedowns and a corruption settlement with US and Brazilian authorities. Excluding those one-time expenses, the Brazilian planemaker said its third-quarter adjusted net income would have been $79 million, up slightly from a year earlier.
The Thomson Reuters consensus among analysts, who rarely account for Embraer's one-time provisions and writedowns in their forecasts, projected a quarterly profit of $65 million. Net revenue rose 18 percent from a year earlier to $1.514 billion on strong commercial jet deliveries. Embraer's gross profit margin rose to 18.8 percent from 17.5 percent a year ago, as more profitable deliveries to airlines offset a weaker margin in executive aviation.
The company also reported a $29 million operating loss before interest and taxes, down from an operating profit of $84 million a year earlier, due in part to a $118 million provision for severance costs from voluntary employee buyouts. Embraer cut nearly 8 percent of its workforce as part of an effort to trim $200 million of operating expenses amid weak business jet sales and downsized defense contracts.