Embraer (ERJ) Stock Slides on Q2 Loss After Probe Provision
NEW YORK (TheStreet) -- Shares of Embraer (ERJ) - Get Report are down 12.59% to $18.53 this afternoon on heavy trading volume after the company posted a surprise loss for the 2016 second quarter this morning due to a provision set aside for a U.S. probe settlement.
Almost 3.5 million shares of the stock have traded so far today, vs. its average of 976,000 per day.
Before Friday's market open, Embraer reported a loss of $99.4 million for the quarter after setting aside $200 million in connection to a U.S. probe under the Foreign Corrupt Practices act.
The company is talking to U.S. authorities about an investigation into aircraft sales outside of Brazil. A settlement is likely to include possible fines, a deferred prosecution agreement and the imposition of an independent monitor to assess compliance, Embraer said.
Adjusted earnings for the period were 24 cents per diluted share, lower than estimates of 40 cents per share. The company also posted revenue of $1.37 billion, down 9.7% year-over-year. However, Wall Street was looking for the company to generate $1.44 billion in the quarter.
Embraer is a Brazilian aircraft company.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "hold" with a ratings score of C.
The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and attractive valuation levels. However, TheStreet Ratings also finds weaknesses including a generally disappointing performance in the stock itself and poor profit margins.
You can view the full analysis from the report here: ERJ