Ducommun Inc. (DCO) announced it has received a contract from The Boeing Company (BA) to produce titanium detail components and subassemblies for the Boeing 787 Dreamliner. Under the terms of the contract, production on the titanium assemblies will continue at the Ducommun AeroStructures facility in Coxsackie, New York.
The 787 Dreamliner is a mid-sized, twin-engine jet airliner with various configurations that can carry up to 290 passengers on routes of 8,000 to 8,500 nautical miles. The plane also uses 20% less fuel than similarly sized airplanes.
Ducommun provides engineering and manufacturing services to the aerospace, defense, and other industries through a wide spectrum of electronic and structural applications. The company is an established supplier of critical components and assemblies for commercial aircraft and military and space vehicles as well as for the energy market, medical field, and industrial automation. It operates through two primary business units – Ducommun AeroStructures and Ducommun LaBarge Technologies.
Boeing enjoys a unique position as the largest aircraft manufacturer in the world in terms of revenues, orders and deliveries, and is also one of the largest aerospace and defense contractors. Besides, its revenues are spread across more than 90 countries around the globe.
Boeing taking into account its performance in the first nine months of 2012, raised its full year 2012 earnings per share guidance to a range of $4.80–$4.95 from its earlier range of $4.40–$4.60. The company also raised its revenue guidance for 2012 to the range of $80.5 billion to $82 billion versus the earlier range of $79.5 billion to $81.5 billion.
The company expects its Commercial Airplanes' 2012 deliveries to come between 585 and 600 airplanes, which are already sold out. This includes an expected 70 to 85 787 and 747-8 deliveries. Commercial Airplanes' 2012 revenue is expected to be between $47.5 billion and $49.5 billion with operating margin around 9.0%.
In the defense space, the company expects defense revenue for 2012 to be between $32.5 billion and $33.0 billion versus its earlier range of $31.5 billion and $32.0 billion with operating margin greater than 9%. Boeing Capital Corporation expects that its aircraft finance portfolio will continue to decline in 2012.
Boeing currently retains a Zacks #3 Rank, which translates into a short-term Hold rating. Considering the fundamentals, we are maintaining our Neutral recommendation on the stock. This is in sync with other aerospace and defense behemoths, General Dynamics Corporation (GD) and Lockheed Martin Corporation (LMT).
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