Embraer holds 2012 outlook, defense unit strong

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Brazil’s Embraer, the world’s largest maker of regional jets, is maintaining its forecasts for deliveries and revenue this year despite a third-quarter drop in output, said Chief Executive Officer Frederico Curado.

Last week Embraer reported that deliveries of commercial and executive jets fell in the third quarter, leaving more than a third of its projected deliveries for the last three months of the year.

Embraer is also depending more on its defense unit, highlighting efforts for growth in that division in the face of canceled orders for its passenger jets and private aircraft, Reuters reports.

The defense unit will likely report revenue near $1 billion in 2012, the division’s chief executive Luiz Carlos Aguiar told Reuters separately on Monday, beating an outlook for revenue between $900 million and $950 million issued in February.

Last year Embraer’s defense revenue reached $1.04 billion, contributing 18 percent of the company’s total, up from less than 5 percent in 2006. Aguiar has said the defense unit could make up a quarter of Embraer’s revenue by 2020.

Brazil’s growing defense budget is driving part of that expansion, with revenue from a government satellite and a new military cargo plane on the way. But rising sales of Embraer’s Super Tucano light attack plane have also diversified revenue.

Aguiar said about 60 percent of defense revenue this year will come from outside Brazil.