Revenue fell most sharply, by 26% to $281 million, in its commercial aviation segment in the three months ended March 31. The company delivered 11 commercial jets in the quarter, three fewer than a year earlier. Overall, revenue fell 14.1%.
The results were "weaker than expected," analysts at Brazilian bank BTG Pactual said in a note to clients.
Shares fell over 4% in Sao Paulo in morning trading.
Embraer has been spending heavily to separate its commercial jet division, in which Boeing is buying a controlling stake for $4.2 billion. Embraer's available cash fell by $512 million in the latest quarter.
Despite the weak results, the company reaffirmed its delivery forecast for 2019 and expects to boost the number of plane deliveries over the next quarters. For 2019, it expects to deliver 85 to 95 passenger jets and 90 to 110 executive jets; in 2018, it delivered 90 passenger jets and 91 executive jets.
Embraer's results have been weak for the past year amid limp demand for executive jets and a runway accident involving its yet-to-be-launched signature military plane, the KC-390, that cost it hundreds of millions dollars. Weak deliveries of commercial planes added to that burden in the first quarter.
Unlike its two other divisions, executive jets and defense, selling commercial passenger jets of up to 150 seats has been profitable for Embraer in recent quarters.
But Embraer is now in the middle of a large-scale transformation after it obtained shareholder approval to sell 80% of its commercial jet division to Boeing for $4.2 billion, a deal that still needs regulatory approval.
As a result of that deal, Embraer will have to rely heavily in the short term on the profits it can generate from its executive jets and defense divisions.
Embraer's Chief Financial Officer Nelson Salgado said on an earnings call that Boeing's crisis relating to its 737 MAX plane, which has been grounded worldwide following two deadly crashes, would not impact the timeline of closing the deal with Embraer, which is still expected by the end of the year.
Still, he said Boeing's troubles would "absolutely not" boost demand for Embraer's planes.
Embraer also released results in Brazil's local currency, the real, which showed revenue faring better and positively affected by the depreciation of the currency against the U.S. dollar. Still, only 10% of Embraer's revenue and 20% of its expenses are denominated in reais, the company said.
(Reporting by Marcelo Rochabrun; Additional reporting by Carolina Mandl and Paula Arend Laier; Editing by Bernadette Baum)
By Marcelo Rochabrun