Ducommun Earnings: Here’s Why Investors are Buying Shares Now

Ducommun Inc. (NYSE:DCO) delivered a profit and missed Wall Street’s expectations, AND came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company. Shares are up 6.20%.

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Ducommun Inc. Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 52.17% to $0.35 in the quarter versus EPS of $0.23 in the year-earlier quarter.

Revenue: Decreased 4.57% to $175.92 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Ducommun Inc. reported adjusted EPS income of $0.35 per share. By that measure, the company missed the mean analyst estimate of $0.41. It missed the average revenue estimate of $185.73 million.

Quoting Management: “We began the year building on our momentum from 2012, with commercial aerospace and defense technologies shipments remaining solid,” said Anthony J. Reardon, chairman, president and chief executive officer. “That said, the Company’s overall revenue fell year-over-year primarily due to continued weakness in our natural resources and industrial markets. We anticipate that the non-A&D side of our business will improve later in 2013 but, in the interim, are focused on implementing a comprehensive growth strategy in these areas and working diligently to manage working capital and costs.
“We’re pleased that Ducommun’s overall backlog remains robust, that our aerospace and defense sales increased 4% year-over-year, and segment EBITDA margins likewise rose. We also amended our credit agreement during the quarter – saving on interest expense going forward – and paid down an additional $7.5 million of debt. Even with the onset of sequestration, we believe the Company’s broad capabilities, focus on operating execution, and longstanding customer relationships keep us well positioned for the balance of 2013.”

Key Stats (on next page)…

Revenue decreased 9.27% from $193.89 million in the previous quarter. EPS decreased 33.96% from $0.53 in the previous quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings has risen from a profit of $0.41 to a profit $0.44. For the current year, the average estimate has moved up from a profit of $1.74 to a profit of $1.83 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)

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