Key Points All the leading industry players have confirmed that the aerospace supply chain is healing and aircraft production is set to ramp significantly in the coming years. GE Aeropace and RTX have both raised guidance recently, partly on the back of improved parts availability, which is helping boost engine and component production. Prospects for aerospace supplier Hexcel are closely tied to aircraft production and the increasing use of composites in newer-generation aircraft. 10 stocks we like ...

We recently published Why These 10 Stocks are Soaring by Double Digits. Hexcel Corp. (NYSE:HXL) is one of the best performers on Thursday. Hexcel soared to a new all-time high on Thursday, as investors gobbled up shares ahead of its quarterly dividend payout, despite a dismal earnings performance and a lower growth outlook for the rest of the year. In intra-day trading, Hexcel Corp. (NYSE:HXL) soared by as much as 16.6 percent to its highest price of $74.35 before paring gains to end the day just up by 1 ...

Key Takeaways Hexcel posted Q3 adjusted EPS of $0.37, down 21% year over year and below consensus estimates.Sales edged up 1.6% above estimates but slipped 0.1% from last year on weaker commercial aerospace demand.2025 EPS view was cut to $1.70-$1.80 from $1.85-$2.05, while sales are now expected at around $1.88 billion.Hexcel Corporation (HXL) reported third-quarter 2025 adjusted earnings of 37 cents per share, which declined 21.3% from the year-ago quarter’s figure of 47 cents. The bottom line also missed ...

Financial Data and Key Metrics Changes - Hexcel generated $456 million in sales and adjusted diluted EPS of $0.37 in Q3 2025, unchanged year over year, reflecting challenging conditions due to slower seasonal sales and continued destocking by commercial OEMs [10][24] - Gross margin for Q3 2025 was 21.9%, down from 23.3% in Q3 2024, impacted by tariffs and inventory reduction actions [10][26] - Adjusted operating income in Q3 was $44.8 million, or 9.8% of sales, compared to $52.9 million, or 11.6% of sales in the prior year [28] Business Line Data and Key Metrics Changes - Commercial aerospace sales were $274.2 million, a decline of 7.3% year over year, primarily due to destocking on the Airbus A350 program [11][24] - Sales for defense, space, and other segments totaled $182 million, an increase of 11.7% on a constant currency basis, driven by strong demand across various platforms [12][25] - Other commercial aerospace sales increased by 9.3% year over year, led by regional jets [11][24] Market Data and Key Metrics Changes - The backlog for commercial aircraft has grown from 13,000 units before the pandemic to over 15,000 today, indicating strong demand [6][7] - Air traffic has recovered to pre-pandemic levels, supporting the outlook for increased production rates in the aerospace sector [6][7] - The company expects to exit 2025 fully aligned with commercial aircraft build rates, positioning for growth in 2026 and beyond [7][35] Company Strategy and Development Direction - Hexcel's strategic focus remains on advanced material science, particularly in the aerospace and defense markets, as it navigates a dynamic environment [5][6] - The company is committed to driving productivity through automation, digitalization, and robotics, while also managing costs and realizing price gains [16][17] - Hexcel plans to return excess cash to stockholders, as demonstrated by a new $600 million share repurchase program [21][37] Management's Comments on Operating Environment and Future Outlook - Management expressed growing confidence in a sustained ramp-up in production based on customer discussions and actions, despite a slow recovery from the pandemic [6][7] - The company anticipates strong free cash flow generation, forecasting over $1 billion in cumulative free cash flow from 2025 to 2028 [17][37] - Management acknowledged the impact of tariffs and ongoing destocking but remains optimistic about future growth driven by increased production rates [14][32] Other Important Information - The divestiture of the Neumarkt, Austria plant was completed, which will not contribute to sales in Q4 2025 or beyond [14][33] - The company is managing headcount closely, with expectations to begin hiring again in early 2026 as production rates increase [15][17] - The company has not repurchased any stock during Q3 2025 but plans to utilize cash generation to repay borrowings from the accelerated share repurchase program [31] Q&A Session Summary Question: Can you talk about the $500 million growth related to manufacturer production rates? - Management indicated that the long-term contract with Airbus for the A350 provides a foundation for capital investments, but inflation has impacted margins [42] Question: What should be the debt or interest costs for 2026 in light of the ASR? - Management suggested that debt will decrease rapidly after the first quarter, with an estimated interest rate of about 5.5% [44] Question: Can margins be higher if commercial aero revenue is higher than in 2024? - Management confirmed that margins can increase, but there is work to offset natural inflation [57] Question: How does the company plan to manage potential continued destocking? - Management plans to lag hiring in response to demand and utilize inventory as a cushion for unexpected demand spikes [59] Question: Is there an opportunity to recapture incremental tariff costs in the future? - Management noted that there are provisions to recover some costs, particularly for export or military use, and they are working on shifting foreign supply to domestic sources [76] Question: How big is the inventory cushion currently? - Management indicated that inventory levels have been running high, with a current cushion of about 90 days, aiming to reduce it to a steady state of 70 days [81]

Hexcel (NYSE:HXL) Q3 2025 Earnings Call October 23, 2025 09:00 AM ET Company ParticipantsSheila Kahyaoglu - Managing DirectorTom Gentile - CEO, Chairman, and PresidentPete Skibitski - Director of Aerospace and Defense Equity ResearchRichard Safran - Managing Director of Aerospace and DefensePatrick Winterlich - EVP and CFOKurt Goddard - VP of Investor RelationsScott Deuschle - Director of Aerospace and Defense Equity ResearchMyles Walton - Managing DirectorGavin Parsons - Director of Aerospace and Defense E ...

Hexcel (NYSE:HXL) Q3 2025 Earnings Call October 23, 2025 09:00 AM ET Speaker3Hello, and thank you for standing by. My name is Tiffany, and I will be your conference operator today. At this time, I would like to welcome everyone to the Hexcel third quarter earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star, then the number one on you ...

Financial Data and Key Metrics Changes - Hexcel generated $456 million in sales and adjusted diluted EPS of $0.37 for Q3 2025, which aligns with expectations despite challenges from slower seasonal sales and continued destocking by commercial OEMs [11][30] - Gross margin decreased to 21.9% from 23.3% in Q3 2024, impacted by tariffs and inventory reduction actions [11][33] - Adjusted operating income was $44.8 million, or 9.8% of sales, compared to $52.9 million, or 11.6% of sales in the prior year [35] Business Line Data and Key Metrics Changes - Commercial Aerospace sales were $274.2 million, a decline of 7.3% year-over-year on a constant currency basis, primarily due to destocking on the A350 program [12][30] - Defense, Space, and Other segment sales totaled $182 million, an increase of 11.7% on a constant currency basis, driven by strong demand across various platforms [13][32] Market Data and Key Metrics Changes - The backlog for commercial aircraft has grown from 13,000 units before the pandemic to over 15,000 today, indicating a recovery in air traffic to pre-pandemic levels [6][7] - The company expects to exit 2025 aligned with commercial aircraft build rates, positioning for growth in 2026 and beyond [7][45] Company Strategy and Development Direction - Hexcel's strategic focus remains on advanced material science, particularly in the aerospace and defense markets, as the company navigates a dynamic environment [5][24] - The company is committed to cost reduction actions and operational streamlining, including the divestiture of non-core assets [18][22] Management's Comments on Operating Environment and Future Outlook - Management expressed growing confidence in a sustained ramp-up in production based on customer discussions and supply chain improvements [6][10] - The company anticipates a multiyear growth cycle for commercial aerospace original equipment production, benefiting from strong positions in major programs [11][24] Other Important Information - The Board of Directors authorized a $600 million share repurchase program, alongside a $350 million accelerated share repurchase program [26][27] - The company has narrowed its sales expectations for 2025 to the lower end of the prior range due to ongoing destocking and tariff impacts [17][40] Q&A Session Summary Question: Can you discuss the implications of the $500 million growth expected from manufacturer production rates? - Management noted that the long-term contract with Airbus for the A350 provides a foundation for capital investments, but inflation has impacted margins, which are expected to be around 16% when production returns to pre-pandemic levels [51][52] Question: What should be expected for debt or interest costs in 2026? - Management indicated that interest costs should be significantly lower than $50 million, with rapid debt reduction expected after the first quarter [54] Question: Can margins be higher in 2026 if commercial aerospace revenue increases? - Management confirmed that margins can improve as production rates increase, although inflation and other costs will need to be managed [67] Question: How is the company managing potential contingencies if destocking continues longer than expected? - The company is managing inventory levels and hiring cautiously, using existing inventory as a buffer against unexpected demand spikes [68] Question: What is the outlook for European defense spending? - Management highlighted a strong growth trend in European defense spending, with commitments to increase from 1% to 5% of GDP, indicating a positive outlook for defense-related sales [100][101]

HXL Investor Briefing October 2025 Composite Lightweighting value proposition COMMERCIAL AEROSPACE 63%* Wings, Fuselage & Empennage Secondary & Interior structures Engines & Nacelles DEFENSE, SPACE & OTHER 37%* Rotorcraft & Fixed Wing Launchers & Satellites Automotive & Recreation 2024 SALES | $1.9 billion Risks, Uncertainties and Other Factors with Respect to Forward-Looking Statements Disclaimer Certain statements contained in this presentation constitute "forward-looking statements" within the meaning of ...

For the quarter ended September 2025, Hexcel (HXL) reported revenue of $456.2 million, down 0.1% over the same period last year. EPS came in at $0.37, compared to $0.47 in the year-ago quarter.The reported revenue represents a surprise of +1.57% over the Zacks Consensus Estimate of $449.17 million. With the consensus EPS estimate being $0.38, the EPS surprise was -2.63%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine thei ...

Core Insights - Hexcel (HXL) reported quarterly earnings of $0.37 per share, missing the Zacks Consensus Estimate of $0.38 per share, and down from $0.47 per share a year ago, representing an earnings surprise of -2.63% [1] - The company posted revenues of $456.2 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.57%, but slightly down from year-ago revenues of $456.5 million [2] - Hexcel shares have increased about 2.3% since the beginning of the year, underperforming the S&P 500's gain of 14.5% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.61 on revenues of $506.04 million, and for the current fiscal year, it is $1.88 on revenues of $1.9 billion [7] - The estimate revisions trend for Hexcel was mixed ahead of the earnings release, resulting in a Zacks Rank 3 (Hold) for the stock, indicating expected performance in line with the market [6] Industry Context - The Aerospace - Defense Equipment industry, to which Hexcel belongs, is currently in the top 39% of over 250 Zacks industries, suggesting a favorable outlook compared to the bottom 50% [8] - Another company in the same industry, Loar Holdings Inc. (LOAR), is expected to report quarterly earnings of $0.22 per share, reflecting a year-over-year change of +46.7% [9]