Embraer Quarterly Profit Drops 49 Percent

Brazilian aircraft maker Embraer said on Wednesday second-quarter profit dropped 49 percent because of a surge in costs as it ramped up production of regional jets. Net income fell to $40.13 million from the year-earlier period.

Earnings before interest, taxes, depreciation and amortization, a measure of cash flow known as EBITDA, fell to $78.7 million from $305.2 million in the second quarter of 2006.

“The output costs are still very high because of the high manufacturing cycles, including the increase in labor costs from overtime payments, while the third production shift is still in the early stages of implementation,” the company said in a statement.

The company said last month it delivered 36 jets in the second quarter and ended the period with a firm order backlog of $15.6 billion, up from $10.2 billion a year earlier. Embraer is the world’s fourth-largest commercial jet maker.