Empresa Brasileira de Aeronautica SA, the Brazilian maker of midsize jetliners for regional carriers, said third-quarter profit rose on higher deliveries.
Net income climbed to $194.9 million, or $1.05 a U.S. share, from $61.4 million, or 33 cents, a year earlier. Sales rose 63 percent to $1.43 billion, the Sao Jose dos Campos- based company said today in an e-mail.
Embraer delivered 47 aircraft, up 57 percent from a year earlier. The results suggest Chief Executive Officer Frederico Curado may be succeeding in his plan to curb bottlenecks by adding equipment, workers and a third shift at the main plant in Sao Jose dos Campos. First-quarter delays had threatened to derail plans to deliver as many as 170 planes this year, up from 130 in 2006.
``Their manufacturing process is definitely improving,'' Christine Min, an analyst at Calyon Securities in New York, said before earnings were released. Min rates the stock ``add'' and doesn't own any. ``They are committed in meeting their delivery targets.''
Embraer's shares were unchanged at 20.50 reais in Sao Paulo trading. The stock has dropped 7 percent this year, compared with a 45 percent gain in the Bovespa benchmark stock index.
In the first nine months of this year, the company boosted its workforce by 23 percent to 23,770 employees to increase output of commercial planes.
Embraer is adding jobs as demand for its commercial and business jets rise. The company won $1.6 billion of orders in the third quarter, prompting its backlog to climb to a record $17.2 billion. Cost of goods sold jumped to $1.12 billion from $647 million.
The company plans to raise the production capacity of its bigger commercial planes to 14 a month by the end of the year from 12 in the first quarter, Curado said in a conference call on Aug. 15. The planes seat 70 to 118 people. Embraer plans to deliver a record 165 to 170 jets this year and 195 to 205 planes in 2008.
Inventories rose 42 percent to $2.68 billion in the quarter as the company bought parts to meet increased production in the fourth quarter.
Embraer also plans to increase the output of other jets starting next year. The company is developing two small business jets, Phenom 100 and Phenom 300, which can seat as many as nine people and a large jet called Lineage 1000. The Lineage uses the same body as the company's commercial jet that seats 100 passengers. Embraer plans to invest $1 billion in the next two years to increase shipments and develop new executive aircraft, Curado said in August.
Embraer is the world's fourth-largest planemaker. Europe's Airbus SAS is the world's largest, followed by Boeing Co. in Chicago and Canada's Bombardier Inc. ( Bloomberg )