Carson aerospace manufacturer Ducommun Inc. this week inked a multiyear contract with Britain’s engine maker Rolls Royce to provide systems for use in Boeing Co.’s 787 Dreamliner.
Terms of the deal were not disclosed, but in a report filed the day of the announcement, analyst Christopher Van Horn with FBR Capital Markets & Co. said the contract is a win on several levels for the company, which is seeking to grow its commercial aviation business.
“We view this as an overall solid contract win that gives Ducommun more exposure to its highest growth segment, establishes a brand new relationship with Rolls-Royce which could lead to future opportunities down the road, and gives Ducommun additional content on one of the industry's most popular aircraft models,” Van Horn wrote. “We reiterate our outperform rating.”
Van Horn said Boeing had a six- to seven-year backlog of orders for engines for the new jet and that demand was expected to grow. Additionally, Rolls Royce’s strong recent financial performance and role as a premier supplier to the aerospace industry could mean future business for Ducommun, he added.
The engine still needs to be certified by the European Aviation Safety Agency, Ducommun said, but that is scheduled to happen before the end of the year.
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