If not for the derivative losses of $120M, ERJ earnings for 4Q08 are $230M versus $200M in 2007 (which included a $35M derivative gain). So, ERJ earned 60 cents instead of $1.25 due to derivative losses, compared to about $1.10 last year. Earnings on the airplane building business are solid.

Back orders declined 3% to about $20B, which is essentially no change. OK, orders are not up, but the ERJ airplane building business is stable, which is great news at this point in the worldwide economic crisis.

In summary, ERJ is a stable, profitable company, and will earn about $2 in 2009. The derivatives department should be scaled back or closed. I expect to see ERJ stock price to trend higher over the next year.