Abstract

Ducommun Incorporated will report fourth-quarter 2025 results Pre-Market on February 26, 2026, and this preview consolidates the latest quarterly actuals, current-quarter forecasts, and recent institutional commentary to frame expectations on revenue, profitability, and earnings momentum.

Market Forecast

Based on current projections, Ducommun Incorporated is expected to deliver revenue of $221.10 million in the current quarter, implying 13.05% year-over-year growth, with forecast EBIT of $22.53 million and adjusted EPS of $0.97, reflecting expected year-over-year increases of 18.90% and 18.72%, respectively. Margin guidance was not formally indicated in the latest forecast dataset, though the combination of revenue, EBIT, and EPS estimates implies positive operating leverage.

Within the company’s operating structure, Electronic Systems remains the primary revenue driver and is expected to continue anchoring performance as mix sensitivity supports earnings quality. The most promising contribution area is expected to be Electronic Systems, which generated $123.08 million in the last reported quarter; segment-level year-over-year comparisons were not disclosed.

Last Quarter Review

In the previous quarter, Ducommun Incorporated posted revenue of $212.56 million, a gross profit margin of 26.57%, a GAAP net loss attributable to the parent company of $64.45 million with a net profit margin of -30.32%, and adjusted EPS of $0.99; revenue grew 5.53% year over year while adjusted EPS was flat year over year. Adjusted EBIT reached $22.44 million, up 6.26% year over year, indicating that core operating performance held up even as GAAP earnings reflected significant non-operating or non-recurring items.

By business line, Electronic Systems contributed $123.08 million and Structural Systems delivered $89.48 million in the last quarter, reflecting a revenue mix that continues to skew toward Electronic Systems; segment-level year-over-year growth rates were not provided.

Current Quarter Outlook (with major analytical insights)

Electronic Systems: mix-led earnings sensitivity and utilization effects

Electronic Systems is expected to remain the cornerstone of Ducommun Incorporated’s quarterly performance. In the most recent quarter, this segment accounted for $123.08 million, or approximately 57.91% of total revenue, underscoring the importance of its volume, pricing discipline, and throughput to consolidated profitability. The current-quarter revenue estimate of $221.10 million alongside forecast EBIT growth of 18.90% year over year and adjusted EPS growth of 18.72% suggests that incremental contribution from Electronic Systems can drive operating leverage if volume mix trends favor higher-value programs and if conversion remains efficient.

The wide gap last quarter between adjusted EPS of $0.99 and a GAAP net loss indicates the presence of material non-operating or non-recurring items; absent a recurrence of such items, the segment’s operational gains should more directly translate into earnings quality. The forecasted progression of EBIT and EPS outpacing revenue implies modest improvement in overhead absorption and/or program-level margins, outcomes that are consistent with a scenario where Electronic Systems’ content retains favorable cost-to-price dynamics. Execution risks for the quarter lie in maintaining schedule adherence and navigating product changeovers without incurring excess scrap, expedite, or rework costs that could erode gross margin. A smooth production cadence within Electronic Systems would support the implied operating leverage embedded in the forecasts.

From a cash conversion perspective, Electronic Systems’ performance can influence working capital swings through inventory levels and receivables timing. If the quarter’s sales mix leans toward shipments with shorter cash cycles or milestone payments, free cash generation could outperform operating income dynamics; conversely, any build in work-in-process or later-term payment milestones could temporarily weigh on free cash flow. The degree to which Electronic Systems sustains its revenue base and manages conversion costs will be pivotal to whether EBIT achieves or exceeds the $22.53 million forecast and whether adjusted EPS tracks the $0.97 expectation.

Structural Systems: margin stabilization, overhead absorption, and order timing

Structural Systems accounted for $89.48 million in the last reported quarter, or roughly 42.09% of total revenue, making it a significant, though secondary, contributor to consolidated results. The segment’s influence on consolidated margins typically reflects its sensitivity to fixed-cost absorption and order timing; steady volume is important to keep labor and overhead rates balanced. With the consolidated forecast calling for revenue growth of 13.05% year over year and EBIT growth of 18.90%, successful execution within Structural Systems could materially support overall margin progression, particularly if throughput improves relative to last quarter.

The variance between GAAP net income and adjusted metrics last quarter points to non-core items overshadowing underlying operations. In this context, Structural Systems’ contribution in the current quarter will be best assessed by examining gross profit capture relative to the previously reported 26.57% consolidated gross margin. If the segment avoids inefficiencies related to changeovers, ensures tight process control, and minimizes non-quality costs, it can help uplift consolidated gross margin in line with the stronger EBIT and EPS growth outlook. Conversely, any slippage in schedule or cost overruns could reduce the implied operating leverage embedded in the forecasts.

Pricing discipline and execution on existing contracts, including adherence to delivery windows and cost targets, will be important for maintaining or expanding margins within Structural Systems. The segment’s performance also interacts with working capital: lower cycle times and predictable delivery schedules reduce inventory bulges and aid cash conversion. A stable quarter with disciplined overhead absorption could contribute to the EBIT outgrowth versus revenue implied by the forecast, supporting the $0.97 adjusted EPS projection and protecting consolidated profitability from dispersion caused by program variability.

Key stock price drivers this quarter: GAAP vs non-GAAP bridge, cost trajectory, and qualitative updates

A primary focus for investors this quarter will be the bridge between GAAP and adjusted results. The recent quarter’s GAAP net loss of $64.45 million versus adjusted EPS of $0.99 highlights material items that masked core performance. Clear disclosure around any non-recurring or non-operating factors—such as impairment, restructuring, settlement effects, or other charges—will shape how the market interprets the quality and repeatability of earnings. In the absence of large one-times, the forecasted 18.90% EBIT growth and 18.72% adjusted EPS growth suggest that underlying operations are poised to improve year over year.

Cost trajectory and gross margin progression relative to the previously reported 26.57% will be watched closely. The forecast indicates that EBIT and EPS may grow faster than revenue, implying some combination of improved mix and cost containment. Confirmation that direct materials, labor efficiency, and overhead rates are trending favorably would validate the operating leverage embedded in the outlook. Any commentary pointing to sustained productivity or de-risked program execution would likely be taken positively, given the negative GAAP net margin of -30.32% last quarter and the need to demonstrate durable margin recovery at the consolidated level.

Another factor drawing attention is the resolution of uncertainty related to legacy matters. On January 7, 2026, the company entered into a confidential settlement regarding a fire at a Mexican performance center. While terms were not disclosed, the settlement removes a discrete overhang and could limit further expenses or contingencies related to that incident. Investors will look for clarity on whether any remaining impacts will affect GAAP results for the current reporting period. Beyond discrete items, qualitative updates on order timing, production cadence, and inventory positioning can influence expectations for free cash flow conversion, which in turn affects how the market discounts the projected EPS path for the rest of the year.

Analyst Opinions

Recent institutional commentary within the current year window is decisively constructive. The ratio of bullish to bearish views is 100% bullish (2 out of 2) versus 0% bearish. On January 28, 2026, B. Riley increased its price target on Ducommun Incorporated to $127 and reiterated a Buy rating, citing improving earnings power and a supportive near-term setup into the fourth-quarter print. Earlier in the month, on January 9, 2026, Truist raised its price target to $124 while maintaining a Buy rating, reflecting confidence in continued revenue growth and margin execution. Market tracking at the end of January featured an average rating of Buy and a mean price target of $121.60, indicating that the Street’s baseline is aligned with a constructive view on earnings trajectory.

The tone and direction of these updates are consistent with the company’s current-quarter forecast profile: revenue projected at $221.10 million, up 13.05% year over year; EBIT estimated at $22.53 million, up 18.90%; and adjusted EPS estimated at $0.97, up 18.72%. The step-up in price targets aligns with a thesis that earnings growth may outpace top-line expansion, a pattern implied by the forecast that typically arises from a mix of improved cost capture and favorable sales mix. Analysts appear focused on how effectively the company can sustain EBIT improvements in light of the divergence between GAAP and non-GAAP results in the previous quarter, with emphasis on the durability of margins and cash conversion as key validation points.

From a risk-reward perspective, the bullish camp’s case hinges on operational consistency and clarity on non-recurring items. The prior quarter’s gross margin of 26.57% and adjusted EBIT of $22.44 million provide a foundation from which the current-quarter EBIT estimate of $22.53 million and higher adjusted EPS can be viewed as plausible if operating cadence remains stable. Analysts also emphasize the importance of transparency around the GAAP-to-adjusted bridge and any lingering effects from the recently settled matter; reduced uncertainty can enhance investor confidence in the earnings quality, especially if management indicates that non-operational impacts will be limited going forward.

Institutional commentary further suggests attention to the company’s revenue mix between Electronic Systems and Structural Systems. Given that Electronic Systems delivered $123.08 million last quarter, analysts view this segment’s throughput and cost adherence as an important determinant of whether earnings meet or beat the $0.97 EPS forecast. If execution in Structural Systems supports overhead absorption and avoids inefficiencies, it can buttress consolidated margins. The general tenor of recent updates implies that, should management reaffirm the revenue estimate near $221.10 million and provide a credible path to sustaining EBIT growth above revenue growth, the positive stance reflected in the higher price targets could be reinforced. In short, the balance of opinions is tilted toward constructive outcomes this quarter, predicated on confirmation of operating leverage and greater clarity on GAAP and non-GAAP dynamics.