Ducommun reports Q1 adjusted EPS 83c, consensus 70c

Reports Q1 revenue $194.1M, consensus $191.98M. “An excellent start to 2025 for Ducommun (DCO) as we continue to make good progress towards our VISION 2027 goals with record gross margins during the quarter along with strong Adjusted EBITDA margins. Net revenue grew 2% to $194.1 million driven by strength in our defense business which helped us overcome the anticipated weakness in commercial aerospace production rates along with destocking,” said Stephen Oswald, chairman, president and chief executive officer. “Defense in Q1 saw strong demand for select missiles, electronic warfare, military radar and military rotary-wing aircraft platforms along with new programs such as the Next Generation Jammer and AMRAAM ramping up. This did offset weaker demand on Boeing 737 MAX and commercial in-flight entertainment products. The company also returned to normalized gross margin growth, expanding 200 bps year-over-year from 24.6% to 26.6%, a new quarterly record, which is an outstanding achievement. Adjusted EBITDA margins as well exceeded $30 million for the second time, expanding 150 bps year-over-year from 14.4% to 15.9%. The Adjusted EBITDA margins in Q1 again, reaffirms our current strategy and keeps Ducommun on track to meet the VISION 2027 financial goal of 18% Adjusted EBITDA. We continue to monitor the tariff environment on a real time basis but do not currently expect it to have a significant impact on our financial outlook. We are largely a U.S. manufacturer with U.S. workers and our domestic facilities generate more than 95% of Ducommun’s revenue. The other good news is we have limited supply chain exposure to China and are putting in plans to largely mitigate any raw materials tariff exposures through either duty exemptions on military products or by passing through to our customers under the terms of our contracts. In December 2022, we laid out our VISION 2027 Plan to investors and as we begin year three of the Plan in 2025, we are well positioned for another strong year towards the goals.”