(MENAFN- The Rio Times) Embraer's third-quarter results paint a picture of a company flying high on demand but grounded by protectionist headwinds.

The Brazilian aerospace giant reported a historic $31.3 billion order backlog-up 38% from last year-and a 16% revenue surge to $2 billion, yet its adjusted net profit plunged 76% to $54 million.

The stark contrast between soaring sales and shrinking profits underscores the toll of U.S. tariffs and one-time gains that boosted 2024's numbers.

The drop in earnings stems largely from the absence of a $150 million Boeing arbitration windfall last year and the lingering impact of U.S. import tariffs on executive jets, which cost Embraer $17 million in the quarter.

Without these tariffs, margins in its executive aviation division would have reached 14.8%, not the lackluster 8.6% reported. Despite these challenges, the company delivered 62 aircraft, a 5% increase over 2024, with commercial aviation leading growth.



Embraer's record backlog, fueled by major orders from Avelo Airlines and LATAM, signals robust confidence in its regional jets and defense aircraft.
Embraer Faces Tariff Headwinds Amid Strong Demand
The company's financial health is improving, with net debt falling to $439 million and free cash flow turning positive. Yet, investors reacted coolly, sending shares down 2.43% as they weighed strong demand against squeezed margins.

The tariffs, a relic of Trump-era trade policies, remain a drag on Embraer's executive jet business, even as the company invests heavily in U.S. operations and employs thousands of American workers.

Efforts to lobby for relief have stalled, leaving Embraer to navigate a market where protectionism often trumps free competition.

Operationally, Embraer is firing on all cylinders. Production lead times have been slashed by up to 40%, and expansions are underway to meet rising demand.

Its Eve subsidiary is also advancing electric aviation, a potential game-changer in urban mobility. For Brazil, Embraer's success is a rare bright spot, proving that private enterprise can thrive even as left-wing policies stifle broader economic growth.

While the company's backlog provides a cushion, the road ahead depends on its ability to mitigate tariff pressures and maintain efficiency. Embraer's story is one of resilience-a Brazilian firm holding its own in a cutthroat global market, despite the odds.

But for it to fully spread its wings, trade barriers must give way to fair competition. Until then, Embraer's journey remains a test of endurance in an uneven playing field.

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