DCO - Ducommun: Robust Air Travel Demand And Defence Backlog

2024-07-16 08:46:10 ET

Summary

• DCO's historical financial results have shown consistent top-line growth. However, margins were contracting modestly. For 1Q24, net revenue continued to grow. Additionally, its margins expanded when compared to previous period.
• DCO's defence backlog is growing, which is a sign that its defence business is growing. Additionally, DCO raised the run rate of the SPY-6 and other defence programmes.
• Currently, air travel demand is strong, and ICAO forecasts it to continue growing. The robust air travel demand is expected to bolster the DCO outlook.

Synopsis

Ducommun ( DCO ) specialises in providing engineering and manufacturing services for high-performance products and high-failure-cost applications, mostly used in the industrial, medical, and aerospace and defence industries. DCO’s historical financial results have shown consistent top-line growth. However, its margins were contracting slightly due to the acquisition of BLR and its restructuring plans. For 1Q24, its net revenue continued to grow. On a positive note, its margins started to improve when compared to the previous period....

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