Embraer S.A. (ERJ) shares took a dip on Monday following the company’s announcement that its arbitration with Boeing Company (BA) and its affiliates has come to an end. As part of the agreement, Boeing will be paying Embraer $150 million. This arbitration stemmed from Boeing’s termination of the Master Transaction Agreement (MTA) back in April 2020, a deal worth $4.2 billion. At the time, Embraer argued that Boeing had wrongfully terminated the MTA, using false claims to avoid closing the deal. They alleged that Boeing’s delays and violations were a result of its own financial and operational challenges.
Despite this settlement, Embraer continues to see positive developments. Last month, the company announced a contract to sell up to six A-29 Super Tucano aircraft to the Uruguayan Air Force (FAU). The deal includes one immediate purchase and a commitment for five more, with deliveries scheduled to begin in 2025. Looking ahead, Embraer anticipates increased deliveries in the second half of 2024, although its adjusted free cash flow, excluding Eve, was negative $215 million in the second quarter due to increased working capital requirements.
Investors seeking exposure to Embraer stock can consider options like the AdvisorShares Dorsey Wright ADR ETF (AADR) and Clough Select Equity ETF (CBSE).
As of Monday’s closing, ERJ shares were down 3.69% at $35.59.
