<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Embraer (NYSE: ERJ) stock has undergone some wild gyrations in recent weeks. The Brazilian aerospace company has been confronted with numerous legal challenges concerning its plan to sell 80% of the capital of its aeronautical activity Boeing (NYSE: BA). In December, a federal judge in Brazil blocked planned joint venture twice, only for the decisions to be quickly overturned by the court of appeal. "data-reactid =" 11 ">Embraer (NYSE: ERJ), the stock has suffered wild gyrations in recent weeks. The Brazilian aerospace company has been confronted with numerous legal challenges concerning its plan to sell 80% of the capital of its aeronautical activity Boeing (NYSE: BA). In December, a federal judge in Brazil blocked planned joint venture twice, only for the decisions to be quickly annulled by the court of appeal.

The Brazilian government supports the Boeing-Embraer agreement. So there is a good chance that it will eventually be implemented. That said, additional court challenges are likely. Until all is finalized, there will remain a real risk that the joint venture plan will fail.

It is therefore essential for Embraer to continue to manage its commercial jet business until the transfer of control to Boeing is complete. From this point of view, his performance this month has been very encouraging. Embraer was able to deliver more than a dozen commercial jets in December, while strengthening many orders for years to come.

An E190-E2 Embraer livery in front of an aircraft hangar.

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Source of image: Embraer.

A surge in shipments end 2018

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Embraer's commercial aircraft production was collapsed this year The company has begun the transition from its current generation models to its new E2-series jet aircraft, and Embraer expects between 85 and 95 commercial jet aircraft in 2018, compared to an average of about 100 in recent years, has only delivered 57 in the first nine months of the year, partly because of some deliveries slip "data-reactid =" 27 "> Embraer's commercial jet production has dropped this year, as the company has transitioned from its current generation models to its new E2 series jets. between 85 and 95 commercial aircraft in 2018, compared to an average of about 100 in recent years, but only 57 in the first nine months of the year, due in part to: some deliveries slip from the third quarter to the fourth quarter.

In recent weeks, the delivery activity has accelerated considerably, with Embraer having achieved its targets for 2018. By December 26th, the aircraft manufacturer had delivered 13 commercial aircraft in December (seven E175s). , five E190 and one E190-E2). This occurred after the delivery of four E175s and one E190 during the last week of November.

This increase in production brought the total deliveries of Embraer in the fourth quarter to 30 commercial aircraft. For the year, it delivered 87 jets, which were already within the guidance range of the company.

At a few days of the year, Embraer may be able to ship even more devices by 2019. More specifically, it is expected to deliver at least one E190-E2 to a Chinese customer before the end of the year. (Of course, there is always a chance that delivery will slip after December 31st.)

Embraer also rebuilds its backlog

One of the biggest challenges Embraer has faced in recent years has been the reduction of the order book. Although the E175 is popular with US regional airlines, this represents a limited market opportunity compared to Embraer's total production. Meanwhile, the company struggled to secure large orders for its E2 series jet from major global airlines. At the end of September, Embraer had only 251 firm orders waiting for commercial jets.

<p class = "web-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Embraer reversed the trend in December. he recently confirmed an order for 100 E175 from Republic Airways, which had previously been advertised as a letter of intent. at the Farnborough Air Show. Brazilian airline Azul has also finalized an order for an additional 21 E195-E2 (also announced as a letter of intent to Farnborough) earlier this month as well. "data-reactid =" 33 "> Embraer reversed the trend in December, but more importantly, recently confirmed an order for 100 E175 from Republic Airways, previously announced as a letter of intent at the Farnborough Air Show. Brazilian airline Azul has also finalized an order for an additional 21 E195-E2 (also announced as a letter of intent to Farnborough) earlier this month.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In addition to these two key transactions, American Airlines In November, another 15 E175s were ordered and Air Kiribati recently ordered two E190-E2s. "data-reactid =" 34 "> Complementing these two key offers, American Airlines ordered 15 additional E175s in November and Air Kiribati recently ordered two E190-E2s.

The story continues

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "By entering the fourth quarter, Embraer had already almost filled all its delivery niches for 2019. The recent increase in order activity has allowed the company to align its customers on much of its delivery niches for 2020. This will allow its sales force to to focus on the brokerage of the world's largest airlines in 2019. in the hope of making a big sale that would validate the E2 series jet aircraft as a viable alternative to Airbus A220. "Data-reactid =" 39 "> As it entered the fourth quarter, Embraer had already almost fully filled its delivery slots for 2019. The recent increase in the number of orders allowed the company to align its customers with a large portion of its sales for 2020 This will allow its sales force to woo some of the world's largest airlines in 2019 in hopes of making a big sale that would validate the E2 series jets as a viable alternative to Airbus A220.

The proposed joint venture with Boeing represents by far the most promising alternative for Embraer's commercial jet business. However, the company's strong orders and deliveries in December should give investors more confidence that Embraer could fend for itself, if necessary.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = " More from The Motley Fool "data-reactid =" 41 "> More from The Motley Fool

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Adam Levine-Weinberg holds shares in Embraer and has been making $ 20 calls with American Airlines since January 2020. The Motley Fool recommends Embraer. The Motley Fool has a disclosure policy."data-reactid =" 49 ">Adam Levine-Weinberg holds shares in Embraer and has been making $ 20 calls with American Airlines since January 2020. The Motley Fool recommends Embraer. The Motley Fool has a disclosure policy.