Ducommun, the aerospace, defense and industrial component maker based in Santa Ana, sees “strong years ahead” with a giant backlog of orders and a jump in quarterly revenue.
The firm’s backlog now tops $1 billion for the first time in Ducommun’s long history; the firm bills itself as the oldest company in the state, founded by Charles Ducommun in 1849, originally a hardware supply store.
The buildup was “driven by the significant growth in orders in our defense business,” Ducommun (NYSE: DCO) said in its quarterly earnings release on Aug. 3.
The backlog represents “potential revenue and is based on customer-placed purchase orders and long-term agreements,” showing plenty of work ahead.
CEO Stephen Oswald praised what he called an “excellent quarter” led by strong commercial aerospace demand and “steady performance” from the defense business.
He called “narrow-body aircraft once again the catalyst in driving commercial aerospace revenues up 37% year-over-year.”
The company’s net revenue for the quarter was just over $187 million, 7.5% higher than the same period of last year.
Ducommun participated at the Paris Air Show in June “which further validated the commercial aerospace recovery has exceeded expectations with plenty of runway ahead,” according to Oswald.
He called an Airbus announcement that the aerospace giant had received the single largest aircraft order ever, by number of aircraft, along with Boeing’s announcement of their single largest order in South Asia welcome news, “as we look towards the second half of 2023 and strong years ahead.” Ducommun counts both as key customers.
Ducommun in the second quarter completed its $115 million purchase of BLR Aerospace of Everett, Wash., among its largest-ever purchases.
BLR, founded in 1992, makes aerodynamic systems that enhance the productivity, performance and safety of helicopters and airplanes, serving commercial and military customers.
CEO Oswald called BLR an “important acquisition.”
He had estimated in April that the BLR acquisition would probably bring Ducommun’s headcount up to around 2,300 to 2,400.
Still some Wall Street investors didn’t like some of what they heard from Ducommun’s earnings release for the three-month period ended July 1.
Net revenue for the second quarter at $187.3 million was below the $189 million estimate cited by investor website Market Screener.
Earnings per share in the 2023 second quarter were 54 cents, which was below the estimated 56 cents apiece cited by Market Screener.
Net income fell almost 43% to $2.4 million in the second quarter. The reasons for the net income drop included higher selling, general and administrative expenses as well as higher interest expense.
The numbers sent the stock price down 8% to $44.27 apiece at the close on Aug. 3, for a market cap of $643 million. The price had climbed back to $44.90 per share as of Aug. 10.