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MEXICO CITY - Brazilian aircraft maker Embraer beat second-quarter earnings forecasts despite cuts by U.S. airliners and a strong currency handicapping its exports - a sign the company may be poised to navigate a global economic downturn, a top executive said Friday.

Embraer, the world's fourth-largest plane maker, is relying on private jets and fuel-efficient, mid-size commercial planes to keep sales up even as record oil prices and a slowing world economy force many U.S. air carriers to cut routes and jobs.

"We have some extra headwinds," CEO Frederico Curado told investors on Friday. "But the message is: We will adapt and keep adapting to make sure that we keep on track."

Empresa Brasileira Aeronatica SA boosted sales and trimmed costs to nearly double net income in the second quarter, delivering 52 aircraft, up from 36 delivered in the same period of 2007. The Sao Jose dos Campos, Brazil-based company reaffirmed plans to deliver from 195 to 200 jets this year, including 10 to 15 of its new Phenom executive jets.

The results beat expectations, posting an operating margin that "represents solid improvement and provides credibility" to company forecasts, according to a research report published Friday by Morgan Stanley.

While stalling airlines including New York-based JetBlue have announced plans to delay some deliveries, Embraer's backlog of orders still rose to a record US$20.7 billion as of June 30 - including US$6 billion for executive jets, bought largely by corporations and wealthy clients considered less vulnerable to soaring oil prices.

"There is a clear reduction of activity in terms of new aircraft demand," Curado said. But by increasing sales of executive jets, trimming costs and streamlining manufacturing, Embraer could keep growing despite tough times, he added.

The plane maker has five new executive models in development and plans to boost business jet sales to 25 per cent of revenue by 2010, up from 20 per cent today, Embraer said. But a slowing world economy may still pare private plane orders, as banks and other large firms cut back on expenses, especially in the U.S., which buys about half the world's planes.

Brazil's real, which gained about 20 per cent against the U.S. dollar in the last year, is meanwhile inflating research and development and other costs for Embraer, as the company sells a bulk of planes in dollars, bringing home less cash to spend in Brazil.

Founded by Brazil's government in 1969 and privatized in 1994, Embraer also boosted sales to defence and government buyers by 17 per cent in the quarter, in June announcing early talks to sell eight 314-B1 Super Tucano light attack and training planes to the United States for use in Iraq.

Embraer also has confirmed it sold one of the turboprop planes to a subsidiary of Blackwater Worldwide, the world's largest security contractor now under investigation for its involvement in alleged smuggling and killings in Iraq.

To combat high oil prices, Embraer may also resume production of more fuel-efficient turboprop planes for commercial use, like the ones it first manufactured in the 1970s, which cost far less to operate than similarly priced jets, Curado said Friday. Commercial aviation still accounted for 69 per cent of the company's second-quarter net sales.

Embraer's second-quarter net income rose 120 per cent to 176 million reals (US$110 million), or 0.24 reals (US$0.15) per share, from 80 million reals (US$50 million), or 0.11 reals (US$0.07) per share, in the same quarter of 2007, the company reported Thursday.

Sales rose 22 per cent to 2.7 billion reals (US$1.7 billion) from the year-ago period.

Embraer shares fell 2.7 per cent to close at 11.63 reals on Sao Paulo's Bovespa stock exchange Friday. The company released its earnings report after markets had closed Thursday.