In This Article:
Positioning itself as a growth leader, Ducommun derives inspiration from its 'Vision 2027'. With expansion opportunities in defense and commercial aerospace, the company is using market demand to fuel its ambitions. Positive trends in margin improvement and production signal a strong positive trajectory ahead.
Ducommun Incorporated is an American company that creates products for the aerospace, defense, and industrial markets. Since its establishment in 1849 at its headquarters in Santa Ana, California, the company has boasted a long tradition of building complex electronic systems and structural components for critical applications on commercial aircraft, military programs, and space exploration.
Ducommun's major products are electronic systems, including printed circuit board assemblies, interconnect systems, and integrated electromechanical assemblies. In addition to structural systems, the company manufactures large contoured aerostructures, fuselage skins, and engine ducts. Revenue is generated from contracts with its aerospace and defense clients to manufacture products, perform engineering support, and provide aftermarket services.
Ducommun's customers are major aerospace manufacturers, including Boeing and Airbus, as well as defense contractors such as Raytheon Technologies. The end market primarily involves the aerospace and defense sectors, which are perceived to have a growing need for more advanced manufacturing solutions to support new aircraft programs and military applications. Ducommun is in an excellent position to take advantage of this recovery by the commercial aerospace industry with a strong backlog of contracts.
Ducommun's Vision 2027 plan is ambitious and exciting, aiming for $950 million to $1 billion in revenue and an 18% EBITDA margin. At current annualized revenues at $800 million and 2024 guidance of $787 million, the company is setting the stage for about 7.4% annual growth. That is well above this year's forecast of 3-4%, but with higher production rates and strong demand for defense equipment, it is within reach. Margins already trend positive at 15.8% for Q3, and as commercial airplane programs start to come online, margin expansion is possible.
Key programs like Boeing’s 737 MAX and 787 and Airbus’ A220 and A320neo are driving growth. These ramp-ups, combined with steady defense sales, give Ducommun a double boost of revenue. As defense demand stays elevated and volumes rise in aerospace, we are likely to see even stronger margins ahead. Delays in production could create challenges, but the overall outlook remains promising.