Core Viewpoint - Hexcel Corporation (HXL) reported a strong second quarter for 2024, with earnings and sales exceeding expectations, although the company has slightly lowered its guidance for the year [11][25][26]. Financial Performance - HXL's second-quarter earnings were 60 cents per share, a 20% increase from 50 cents in the same quarter last year [25]. - The company's net sales for the second quarter totaled $500.4 million, surpassing the Zacks Consensus Estimate of $482 million by 3.8% and reflecting a 10.1% year-over-year improvement from $454.3 million [26]. - Hexcel's gross margin improved to 25.3%, up 90 basis points from the prior year, attributed to favorable cost leverage from higher sales [12]. - Adjusted operating income was $72 million, compared to $61.8 million in the previous year [18]. - Cash and cash equivalents decreased to $75.4 million as of June 30, 2024, down from $227 million at the end of 2023 [4]. Sales Breakdown - Commercial Aerospace segment saw net sales increase by 21.3% year-over-year to $320.7 million, driven by growth in widebody and narrowbody sales [3]. - Space and Defense segment reported a 1% year-over-year increase in net sales to $138.9 million, supported by strong military helicopter sales [13]. - Industrial segment experienced a decline, with net sales decreasing by 22.3% year-over-year to $40.8 million due to a downturn in other sub-markets [27]. Guidance and Outlook - Hexcel has adjusted its 2024 sales guidance to a range of $1.90-$1.98 billion, down from the previous range of $1.93-$2.03 billion, with the Zacks Consensus Estimate at $1.94 billion [11]. - The company now expects adjusted earnings per share in the range of $2.02-$2.18 for 2024, lower than the prior guidance of $2.10-$2.30 [15][21]. - Free cash flow is projected to be approximately $200 million for 2024, consistent with previous guidance of more than $200 million [29]. Debt and Cash Flow - Long-term debt increased to $794.9 million as of June 30, 2024, up from $699.4 million at the end of 2023 [14]. - Adjusted free cash outflow was $14.4 million, an improvement from $44.7 million in the year-ago period [20]. - Cash flow from operating activities for the first half of 2024 was $37.2 million, compared to $30.1 million in the same period last year [28].

This quarterly report represents an earnings surprise of 9.09%. A quarter ago, it was expected that this maker of lightweight composite materials would post earnings of $0.44 per share when it actually produced earnings of $0.44, delivering no surprise. Hexcel shares have lost about 7.9% since the beginning of the year versus the S&P 500's gain of 17.2%. There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only d ...

Financial Performance - Net sales for Q2 2024 were $500.4 million, a 10.1% increase from $454.3 million in Q2 2023, with a 6.7% increase for the first half of 2024 compared to the same period last year[77]. - Operating income for Q2 2024 was $71.8 million, a 17.1% increase from $61.3 million in Q2 2023, with a slight increase to $124.7 million for the first half of 2024 compared to $124.1 million in the same period last year[90]. - GAAP operating income for the quarter ended June 30, 2024, was $71.8 million, compared to $61.3 million in the same quarter of 2023[110]. - Adjusted net income (non-GAAP) for the first six months of 2024 was $87.6 million, compared to $85.7 million in the same period last year[110]. Sales Performance - Commercial Aerospace sales increased by 21.3% to $320.7 million in Q2 2024, and by 13.0% to $620.0 million for the first half of 2024, driven by growth in widebody aircraft[83]. - Engineered Products segment saw a 21.1% increase in Q2 2024 sales to $91.8 million, with a 18.9% increase to $184.6 million for the first six months of 2024, primarily due to higher Commercial Aerospace sales[82]. - The Industrial market experienced a significant decline, with sales down 22.3% to $40.8 million in Q2 2024 and down 24.9% to $74.7 million for the first half of 2024[85]. Margins and Expenses - Gross margin for Q2 2024 was 25.3%, up from 24.4% in Q2 2023, while the first half of 2024 gross margin was 25.2%, down from 26.2% in the prior year[87]. - Research and technology expenses increased by 10.5% to $14.7 million in Q2 2024, driven by higher employee-related costs and development project expenses[89]. - Interest expense decreased by 12.0% to $8.1 million in Q2 2024 and by 21.5% to $14.6 million for the first half of 2024, attributed to lower average debt levels[92]. Cash Flow and Financing - Net cash provided by operating activities for the first six months of 2024 was $37.2 million, an increase from $30.1 million in the same period last year[101]. - Capital expenditures for the first six months of 2024 were $51.6 million, down from $74.8 million in the same period last year[102]. - Net cash used for financing activities was $136.0 million for the first six months of 2024, compared to net cash provided of $34.0 million in the same period in 2023[103]. - Free cash flow (non-GAAP) for the first six months of 2024 was $(14.4) million, an improvement from $(44.7) million in the same period last year[111]. Debt and Liquidity - Cash on hand as of June 30, 2024, was $75.4 million, down from $227.0 million at December 31, 2023, while total debt increased to $795.0 million from $699.5 million[97]. - As of June 30, 2024, total borrowings under the senior unsecured credit facility were $95.0 million, with undrawn availability of $655.0 million[98]. - The next significant scheduled debt maturity will occur in August 2025 when the 4.7% Senior Unsecured Notes are due[104]. Shareholder Returns - The remaining authorization under the share repurchase program as of June 30, 2024, was $285.3 million[100]. - Quarterly dividend declared was $0.15 per share, payable on August 9, 2024[100]. Challenges and Outlook - The company continues to face challenges related to global logistics, supply chains, and inflationary pressures, which may impact future financial results[76].

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |---------------------------------------------------------------------------------------------|-------|------------------|-------|---------|---------------------------|-------|--------------------|-------|------------------------------------------|-------|-------------------------------------|----------------------| | Six Months Ended June 30, 2024 and 2023 \n(In millions) \nMarket \nCommercial Aerospace | | \n2024 \n620.0 | $ | ...

Zacks Consensus Estimate The earnings report, which is expected to be released on July 18, 2024, might help the stock move higher if these key numbers are better than expectations. On the other hand, if they miss, the stock may move lower. This maker of lightweight composite materials is expected to post quarterly earnings of $0.56 per share in its upcoming report, which represents a year-over-year change of +12%. Estimate Revisions Trend Investors should keep in mind that the direction of estimate revision ...

Matthieu Douhaire /iStock Editorial via Getty Images I have covered Hexcel (XCL) for several years now, and while I'm bullish on the company's prospects, the reality is that the stock price has gone nowhere but down over the past few years. More recently, there have been some changes that I'm also not quite impressed with. So, I believe it's a good time for me to carefully reconsider my buy rating for the business in a balanced way. Hexcel CEO Change Adds To Risks One thing that I'm not impressed with about ...

It has been about a month since the last earnings report for Hexcel (HXL) . Shares have added about 10.8% in that time frame, outperforming the S&P 500. Will the recent positive trend continue leading up to its next earnings release, or is Hexcel due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers. Hexcel's Q1 Earnings Match Estimates, Sales Miss Hexcel ...

Financial Data and Key Metrics Changes - First quarter sales exceeded $472 million, representing a 3% increase compared to Q1 2023 [51] - Adjusted diluted EPS for the first quarter was $0.44, down year-over-year but up sequentially [51] - Gross margin for Q1 2024 was 25%, compared to 27.9% in Q1 2023, with a sequential improvement of 250 basis points from Q4 2023 [83][84] - Adjusted operating income was $54.1 million, or 11.5% of sales, down from $63 million or 13.8% in the prior year [86] Business Line Data and Key Metrics Changes - Commercial Aerospace sales were approximately $299.3 million, a 5.2% increase compared to Q1 2023, driven by growth in wide-body programs [81] - Space & Defense sales totaled $139 million, a 10% increase in constant currency compared to Q1 2023, led by programs like the Lockheed Martin F-35 [52][54] - Industrial sales were about $34 million, representing a decline of over 28% year-over-year due to reduced consumer spending [74] Market Data and Key Metrics Changes - The commercial aerospace market saw a recovery in global passenger traffic, surpassing 2019 levels, which positively impacted sales [66] - Narrow-body sales showed sequential improvement, although challenges remain in the supply chain [68] - The industrial market faced softness as global consumers pulled back on spending, affecting sales across various submarkets [74] Company Strategy and Development Direction - The company aims to drive operating income margins back to mid-teens and beyond, targeting a return to 17%-18% levels [42] - Focus on innovation and advancing technologies in lightweight composites to meet growing demand in aerospace and defense sectors [78] - The transition in leadership to Tom Gentile is expected to maintain momentum and focus on execution and operational excellence [100][102] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism regarding the recovery in the aerospace sector, particularly in wide-body production, despite challenges in narrow-body supply chains [67][108] - The geopolitical situation is expected to stimulate investment in defense systems, potentially leading to increased demand for Space & Defense products [112] - Management remains confident in achieving full-year guidance and mid-term growth targets, supported by strong customer relationships and market demand [78][124] Other Important Information - The company repurchased $101 million of stock during the first quarter and declared a quarterly dividend of $0.15 per share [89] - The company is focused on tightly managing working capital, with cash used in operating activities decreasing compared to the previous year [87] Q&A Session Summary Question: Visibility into industrial revenue guidance - Management acknowledged challenges in the European market affecting industrial revenue but noted strong order activity and customer engagement [7][8] Question: Margin implications of industrial revenue decline - Management indicated that the decline in industrial sales has a small margin impact, with expectations for improvement over time [9][10] Question: Destocking in the narrow-body segment - Management clarified that destocking was minimal, with some signs of restocking, particularly in wide-body programs [18][116] Question: Share repurchase and diluted shares - Management explained that the increase in diluted shares was due to normal Q1 stock issues, with the impact of share buybacks expected to be seen in subsequent quarters [118] Question: Expectations for A350 and Airbus - Management expressed confidence in the A350 program, noting strong orders and visibility into customer demand for wide-body aircraft [125]

Hexcel Corporation (HXL) reported first-quarter 2024 adjusted earnings of 44 cents per share, which came in line with the Zacks Consensus Estimate.In the first quarter, Hexcel posted GAAP earnings of 43 cents per share compared to the prior-year quarter’s earnings of 50 cents.Total SalesIn the first quarter, the company’s net sales totaled $472.3 million, which missed the Zacks Consensus Estimate of $475 million by 0.6%. However, the top line witnessed an improvement of 3.2% from the year-ago quarter’s repo ...

For the quarter ended March 2024, Hexcel (HXL) reported revenue of $472.3 million, up 3.2% over the same period last year. EPS came in at $0.44, compared to $0.50 in the year-ago quarter.The reported revenue represents a surprise of -0.56% over the Zacks Consensus Estimate of $474.94 million. With the consensus EPS estimate being $0.44, the company has not delivered EPS surprise.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to Wall S ...