(Adds details from second call with company executives)
By Marcelo Rochabrun
SAO PAULO, Oct 30 (Reuters) - Brazilian planemaker Embraer SA reported a third-quarter net loss of 84 million reais ($21 million), citing a drop in commercial jet deliveries as it worked to finalize a deal to sell 80 percent of that division to Boeing Co.
Results missed the consensus forecast for quarterly profit of 4.2 million reais in a Refinitiv poll of analysts, and was well below a profit of 355 million reais a year earlier.
Embraer expects to get government approval and call a shareholders meeting to vote on the deal by December, Chief Executive Officer Paulo Cesar Silva said on a call with analysts. He added the deal is unlikely to close before the second half of 2019.
Overall revenue fell 12 percent from a year ago, and commercial aircraft revenue fell 30 percent.
The value of firm orders in Embraer’s backlog, a gauge of expected revenue, hit a five-year low this quarter, as Jet Blue switched an order to rival Airbus.
Embraer also removed a firm order for 100 passenger jets from its backlog due to uncertainty over whether pilots would agree to fly its E175-E2 planes for U.S. regional airlines. Executives told analysts on a call the company does not expect those airlines to prioritize changes to lift restrictions on its planes.
Analysts at investment bank BTG Pactual called the results “soft” with “weak margins across the board” as expected.
Much now depends on whether Embraer can complete the sale of 80 percent of its commercial aviation business to Boeing. Embraer expects business for the division to remain flat or achieve a small upside next year.
The deal was agreed in July. This week, Embraer received clear signals the government was likely to approve the sale, after far-right lawmaker Jair Bolsonaro won Brazil’s presidential election.
Bolsonaro’s likely future defense minister told Reuters the president-elect favored the tie-up and it could be approved this year.
Shares in the Brazilian planemaker opened 1 percent lower before joining a rally on the benchmark Bovespa stock index , rising almost 4 percent in late morning trading.
“We don’t believe Embraer shares are pricing in upside from the (Boeing) deal,” the BTG Pactual note said.
The sale to Boeing will force Embraer to sustain the company largely on the back of its executive jet and defense divisions. Both have operated at a loss in recent quarters.
The business jet division registered an operating loss of 32 million reais for the first nine months of the year; Embraer’s defense division had an operating loss of 443 million reais.
The company said it expects its business jet division to grow in 2019, but did not address the future of its defense division, which is largely dependent on contracts with Brazil’s military.
$1 = 3.7172 reais Reporting by Marcelo Rochabrun Additional reporting by Paula Laier Editing by David Goodman, Bernadette Baum and David Gregorio