UPDATE 1-United order boosts Embraer outlook despite profit miss

Mon Apr 29, 2013 8:53pm EDT
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* Order for United Express fleet worth up to $2.9 bln

* Profit falls by two thirds in Q1 on falling output

By Brad Haynes

SAO PAULO, April 29 (Reuters) - Brazil's Embraer SA , the world's biggest maker of regional jets, said an order for at least 30 new planes from United Airlines on Monday raised the odds of greater production next year.

The order, which included options for 40 additional E-175 jets, is worth a combined $2.9 billion at list prices, providing a silver lining for the company after weaker-than-expected quarterly earnings.

Hurt by rising labor costs and a drop in commercial aircraft production, Embraer posted a 67 percent drop in first-quarter net income to $30 million, falling short of an average estimate of $58 million in a Reuters poll.

The new order from United Continental, which will include the 76-seat regional jets in its United Express fleet, reinforces hopes that this year's lower E-Jet output was just a cyclical ebb.

"Without a doubt, this order makes it more likely we'll increase the pace of production next year," said Paulo Cesar de Souza e Silva, the head of Embraer's commercial aviation unit, in a telephone interview.

"We're doing really well this year."   Continued...