Ducommun CEO sees growth in commercial, military segments
Ducommun Inc. (NYSE: DCO) CEO Joe Berenato said the aircraft parts maker expects continued growth in its commercial and military segments. Berenato made the comments during a morning conference call.
The chief executive said the company sees outsourcing opportunities in its commercial segment, as well as rising business activity rates by The Boeing Company (NYSE: BA), one of the firm’s chief customers. Ducommun also sees outsourcing opportunities in business jets and light commercial aircrafts, he said.
Wars in Iraq and Afghanistan continue to drive the company’s military segment, he said.
“While the overall defense budget will stay large, there will be winners and losers within that framework,” Berenato said. “Our focus is to continue trying to increase our design and engineering content and moving and migrating to higher-level assemblies.”
He also said Ducommun sees new opportunities for the firm’s titanium and composite-based aircraft components.
Before the opening, Ducommun reported third-quarter sales of $94.7 million, above analyst estimates of $90.6 million and 16% above $81.6 million a year earlier. The firm’s quarterly profit rose 42% to $5.8 million, or $0.55 per share, above Wall Street projections of $0.45 per share and compare with $4.1 million, or $0.40 per share, during the same period of 2006.
“We have reported another strong quarter for both revenue and profit,” Berenato said.
Ducommun’s costs and expenses for the three months ended Sept. 30 rose 15% to $86 million, from $75 million a year earlier. The company’s interest tax expense increased 22% to $2.2 million, from $1.8 million during the prior-year period.
The firm’s Mexico facility will be operational next calendar year, but Berenato said the firm does not expect lower capital expenditures during the year. He said this is because costs due to capital expenditures are largely dependent on new contracts.
CFO Greg Hann said the company has seen some price dampening due to the credit crisis, and the firm will continue to look for merger and acquisition opportunities.
In midday trading, DCO shares are up 5.63%, or $2.08, at $39.03. Over the last 52 weeks, shares have ranged from $19.32 to $40.84.
