Embraer profits plunge 40% on financial costs

Washington DC
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Embraer blamed higher financial expenses and income taxes for a more than 40% decline in first quarter earnings compared to last year.

The Brazilian airframer on 26 April posted a net income of $62.7 million with a profit margin of 5.4%, which is down from a $106 million profit and a 10% margin in the first quarter 2010.

The Sales during the quarter increased more than 10% to $1.16 billion, while operated expenses climbed more than 11% to $887.7 million.

The key differences between last year's quarterly results involved financial expenses. Instead of posting a $2.6 million gain from income tax credits in 2010, Embraer instead paid the Brazilian government $14.6 million. Financial expenses also cost the company $7.9 million, while last year the company pocketed a $6.1 million gain in the same accounting category.

Embraer delivered 21 commercial aircraft in the first quarter, including 13 E190s, six E195s and 2 E175s.