Embraer S.A. (ERJ) and Telecomunicações Brasileiras S.A. (“Telebras”) recently signed a shareholder agreement, to form Visiona Tecnologia Espacial S.A., the satellite program within Brazilian space industry. Embraer will hold 51% of Visionas share capital, while Telebras will hold the rest.
Following the terms of Memorandum of Intent announced in November 2011, Visiona will focus on the Brazilian Geosynchronous Satellite, which will serve the satellite communications needs of the Federal Government. Moreover, it will support the National Broadband Program as well as strategic defense transmissions.
Visiona, with its head offices in the Technological Park of the city of São José dos Campos, São Paulo, Brazil, will team up with Brazil’s aerospace educational and research organizations. This is expected to accelerate the capabilities of the Brazilian space industry positioning Visiona as the leader of the Space Technology Development Centern in the coming years.
Frederico Curado, Embraer President and CEO, proudly announced this project as a ‘historic step’ targeted toward technological and industrial improvement of Brazil’s space industry. Moreover, he felt confident enough on Embraer’s partnership with Telebras as well as with the Brazilian Government, foreseeing a successful satellite program in times ahead.
Brazil-based Embraer’s product portfolio supports strong customer orders worldwide. Its diversified global footprint offers tough competition to industry players of the likes of Boeing Co. (BA), Lockheed Martin Corporation (LMT), and Northrop Grumman Corporation (NOC).
We currently maintain a long-term ‘Neutral’ recommendation on the stock. Furthermore, Embraer has a Zacks # 3 Rank, which translates into a short-term (1-3 months) ‘Hold’ rating.
The Zacks Consensus earnings per share Estimate for the second quarter 2012 is 56 cents.
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