Embraer earnings down on falling regional jet production SAO PAULO (Reuters) - Brazilian planemaker Embraer SA (EMBR3.SA) will likely report slightly weaker earnings on Monday as rising labor costs and slower production of its commercial jets underscored ongoing challenges, despite recent government support. Embraer is expected to post an 11 percent decline in first-quarter earnings from a year ago to $58 million, according to the average estimate of five analysts in a Reuters survey. Deliveries of Embraer regional jets that seat less than 120 passengers, its biggest source of revenue, fell in the quarter to the lowest in at least five years after poor demand withered its order backlog. Slowing assembly lines and uncertainty about upcoming orders have led to sharp swings in Embraer's stock price, which touched a five-year high this month, bolstered by hopes of new demand from major U.S. airlines. The day-to-day volatility of Sao-Paulo listed shares rose in the past two weeks to the highest in a year and a half. Embraer's earnings have benefited from tax breaks and a weaker local currency - two results of government policy supporting manufacturers and exporters - but the cost of production in Brazil continues to weigh on profitability. A collective bargaining agreement signed in December pushed up payroll costs by at least 6 percent in the quarter, according to Bradesco analysts led by Edigimar Maximiliano Jr. Earnings before interest, taxes, depreciation and amortization, a gauge of operating profit known as EBITDA, is expected to fall 9 percent from a year earlier to $135 million. Several analysts forecast improving earnings over the course of the year, as deliveries recover from the seasonal weakness of the first quarter. (Reporting by Brad Haynes and Roberta Vilas Boas.