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]

Company Overview - Hexcel is a leader in advanced composites for aerospace and other markets, offering a broad portfolio of solutions [5, 6, 7, 8, 11, 12] - The company's products are used in commercial aerospace (63% of 2024 sales) and defense, space & other industries (37% of 2024 sales) [6, 7] - Hexcel's total sales in 2024 were $1.9 billion [7] Market Trends and Growth Drivers - Composites penetration is increasing with each new aircraft platform, with next-generation narrowbody aircraft expected to have over 60% composites [10, 53] - Airbus and Boeing have a combined backlog of over 15,000 commercial aircraft, representing $10 billion in future sales for Hexcel [31] - Rotorcraft accounts for approximately 40% of Defense & Space sales [36] Financial Performance and Guidance - Hexcel provides 2025 financial guidance with sales of approximately $1.88 billion [44] - Commercial Aerospace sales are expected to be down mid-to-upper single digits in 2025, while Defense, Space & Other sales are expected to be up mid-to-upper single digits [44] - Adjusted diluted EPS is projected to be $1.70 – $1.80 per share in 2025 [45] - Free cash flow is estimated to be approximately $190 million in 2025, with capital expenditures less than $90 million [45] Strategic Advantages - Hexcel has an unrivaled product portfolio and a culture of innovation, driving productivity and sustained growth [47, 48] - The company benefits from high barriers to entry and strong customer relationships [8, 9, 48] - Hexcel's products enable lightweighting, which saves fuel and reduces transportation emissions [47]

Core Insights - Hexcel reported revenue of $456.2 million for the quarter ended September 2025, a slight decrease of 0.1% year-over-year, with EPS at $0.37 compared to $0.47 in the same quarter last year [1] - The revenue exceeded the Zacks Consensus Estimate of $449.17 million by 1.57%, while the EPS fell short of the consensus estimate of $0.38 by 2.63% [1] Financial Performance Metrics - Net Sales in Commercial Aerospace - Composite Materials were $230.6 million, below the estimated $242.52 million, reflecting a year-over-year decline of 7.9% [4] - Net Sales in Defense, Space & Other - Composite Materials reached $132.6 million, surpassing the estimated $106.54 million, marking a significant increase of 54.4% year-over-year [4] - Net Sales in Commercial Aerospace - Engineered Products were $43.6 million, slightly below the estimated $45.87 million, showing a decline of 4.4% year-over-year [4] - Net Sales in Engineered Products totaled $94.4 million, close to the estimated $94.99 million, with a year-over-year increase of 6.1% [4] - Net Sales in Defense, Space & Other - Engineered Products were $49.4 million, slightly above the estimated $49.12 million, reflecting a year-over-year increase of 16.8% [4] - Total Net Sales in Composite Materials were $382.1 million, exceeding the estimated $349.06 million, but showing a year-over-year decline of 2.1% [4] - Total Net Sales in Defense, Space & Other reached $182 million, surpassing the estimated $152.25 million, with a year-over-year increase of 42% [4] - Total Net Sales in Commercial Aerospace were $274.2 million, below the estimated $290.9 million, reflecting a year-over-year decline of 7.3% [4] Operating Income - Operating income for Composite Materials was $39.9 million, below the average estimate of $42.25 million [4] - Operating income for Corporate & Other was reported at -$17.5 million, slightly better than the estimated -$18 million [4] - Operating income for Engineered Products was $13.6 million, significantly above the average estimate of $8.31 million [4] Stock Performance - Hexcel's shares have returned +3.6% over the past month, outperforming the Zacks S&P 500 composite's +1.1% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

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]

Shares of Hexcel (NYSE:HXL) were little changed in extended trading Wednesday after the aerospace materials supplier reported third-quarter revenue that topped Wall Street’s estimates. The company reported adjusted earnings of $0.37 per share, missing analysts’ expectations of $0.38 per share, and revenue of $456 million, surpassing the ...

Financial Performance - Net sales for Q3 2025 were $456.2 million, a slight decrease of 0.1% compared to Q3 2024's $456.5 million, while net sales for the first nine months of 2025 were $1,402.6 million, down 1.9% from $1,429.2 million in the same period last year [88]. - Operating income for Q3 2025 was $36.0 million, a decline of 31.4% from $52.5 million in Q3 2024, and for the first nine months of 2025, it was $110.2 million, down 37.8% from $177.2 million in the prior year [104]. - Net income for Q3 2025 was $20.6 million, a decrease of 48.2% from $39.8 million in Q3 2024, and for the first nine months of 2025, net income was $63.0 million, down 50.1% from $126.3 million in the same period last year [88]. - Gross margin for Q3 2025 was 21.9%, down from 23.3% in Q3 2024, and for the first nine months of 2025, it was 22.4%, compared to 24.6% in the same period last year [100]. - Adjusted operating income for Q3 2025 was $44.8 million, compared to $52.9 million in Q3 2024, while for the nine months, it was $144.3 million versus $179.0 million in the prior year [124]. - GAAP net income for Q3 2025 was $20.6 million, down from $39.8 million in Q3 2024, with adjusted net income at $29.8 million compared to $38.3 million in the same quarter last year [125]. - Free cash flow for the first nine months of 2025 was $49.9 million, down from $58.9 million in the same period of 2024 [126]. Segment Performance - Composite Materials segment net sales for Q3 2025 were $363.2 million, a decrease of 1.2% from $367.6 million in Q3 2024, while Engineered Products segment net sales increased by 4.6% to $93.0 million in Q3 2025 [93][94]. - Commercial Aerospace sales decreased by 7.3% to $274.2 million in Q3 2025, primarily due to inventory destocking on Airbus and Boeing programs, while Defense, Space & Other sales increased by 13.3% to $182.0 million [96][97]. Operating Expenses and Income - Operating expenses for Q3 2025 included a loss of $3.4 million related to the divestiture of the Neumarkt plant and restructuring charges of $1.1 million related to the closure of the Belgium facility [103]. - Interest expense for Q3 2025 was $9.2 million, an increase of 8.2% from $8.5 million in Q3 2024, primarily due to higher average borrowings and interest rates [107]. - Tax expense for Q3 2025 was $6.2 million, up from $4.2 million in Q3 2024, while the nine-month tax expense decreased to $21.6 million from $27.8 million in the prior year [109]. Cash Flow and Debt - Cash on hand as of September 30, 2025, was $90.5 million, down from $125.4 million at the end of 2024, with total debt increasing to $757.9 million from $700.7 million [110]. - Net cash provided by operating activities for the first nine months of 2025 was $105.0 million, compared to $127.3 million in the same period of 2024 [116]. - The weighted average interest rate for the credit facility was 5.57% for the nine months ended September 30, 2025 [111]. - The next significant debt maturity is not until February 2027, when the 3.95% Senior Unsecured Notes are due [119]. - The company expects to meet short-term liquidity requirements through net cash from operating activities and cash on hand, with no significant debt repayments required until 2027 [112]. Risks and Challenges - The company is facing challenges from global logistics, supply chain issues, and tariffs, which have increased material costs and may impact future sales and operations [87]. - The company faces known and unknown risks that may cause actual results to differ materially from forward-looking statements, including macroeconomic factors and geopolitical issues [130]. - Significant customers like Airbus and Boeing are critical, with potential reductions in sales impacting overall performance [130]. - There are concerns regarding the availability and cost of raw materials, influenced by supply disruptions, inflation, and tariffs [130]. - Changes in government defense procurement or investment budgets could significantly impact the company's operations [130]. - The company acknowledges risks related to cybersecurity, including potential breaches or intrusions [130]. - The ability to complete share repurchases and the timing of such actions remain uncertain [130]. Strategic Initiatives - The company is taking actions to mitigate risks, including seeking exemptions, alternative sourcing, and implementing price increases where feasible [87]. - Strategic initiatives, including sustainability goals and restructuring activities, are crucial for the company's future success [130]. - The company has a remaining authorization of $134.0 million under the 2024 Share Repurchase Plan and approved an additional $600 million share repurchase plan on October 22, 2025 [113][114]. - The company does not undertake any obligation to update forward-looking statements or risk factors unless required by law [131].

Financial Performance - Q3 2025 net sales were $456.2 million, a slight decrease of 0.1% compared to Q3 2024 sales of $456.5 million[3]. - Q3 2025 GAAP diluted EPS was $0.26, down 46.9% from $0.49 in Q3 2024; adjusted diluted EPS was $0.37, a decrease of 21.3% from $0.47[5]. - Adjusted operating income for Q3 2025 was $44.8 million, or 9.8% of sales, down from $52.9 million, or 11.6% of sales in Q3 2024[10]. - Gross margin for Q3 2025 was 21.9%, down from 23.3% in Q3 2024, reflecting a decrease in profitability[22]. - Net income for the nine months ended September 30, 2025, was $63.0 million, a decline of 50.5% from $126.3 million in the same period of 2024[22]. - The company reported a basic net income per share of $0.26 for Q3 2025, down from $0.49 in Q3 2024[22]. - The company reported a GAAP net income of $63.0 million for the first nine months of 2025, compared to $126.3 million in the same period of 2024[29]. Sales Breakdown - Commercial Aerospace sales for Q3 2025 were $274.2 million, a decrease of 7.3% compared to Q3 2024, primarily due to inventory destocking related to the Airbus A350[8]. - Defense, Space & Other sales increased by 13.3% to $182.0 million in Q3 2025, driven by growth in fighters, rotorcraft, and space programs[9]. - For the first nine months of 2025, net sales to external customers totaled $1,402.6 million, a decrease from $1,429.2 million in the same period of 2024[27]. - Commercial Aerospace sales for Q3 2025 were $274.2 million, down 7.3% from $295.9 million in Q3 2024[25]. - Defense, Space & Other sales increased by 13.3% to $182.0 million in Q3 2025, compared to $160.6 million in Q3 2024[25]. Cash Flow and Capital Management - Hexcel expects to generate over $1 billion in free cash flow over the next four years, with a free cash flow of $49.9 million reported for the first nine months of 2025[6]. - Free cash flow for the nine months ended September 30, 2025, was $49.9 million, down from $58.9 million in the same period of 2024[24]. - Free cash flow for the first nine months of 2025 was $49.9 million, down from $58.9 million in the same period of 2024[29]. - An additional $600 million share repurchase authorization was approved, with a $350 million accelerated share repurchase program initiated[6]. - The company declared a quarterly dividend of $0.17 per share, payable on November 10, 2025[16]. Guidance and Future Outlook - The company revised its 2025 sales guidance to around $1.88 billion, reflecting the impact of tariffs[16]. - For 2025, adjusted diluted EPS guidance is revised to $1.70 to $1.80, reflecting the impact of tariffs[19]. Balance Sheet Highlights - Cash and cash equivalents decreased to $90.5 million as of September 30, 2025, from $125.4 million at the end of 2024[23]. - Total assets increased to $2,758.4 million as of September 30, 2025, compared to $2,725.6 million at the end of 2024[23]. - Total liabilities decreased slightly to $1,191.7 million as of September 30, 2025, from $1,197.7 million at the end of 2024[23]. - The total debt as of September 30, 2025, was $757.9 million, an increase from $700.7 million at the end of 2024[34]. - Hexcel's total debt, net of cash, was $667.4 million as of September 30, 2025, compared to $575.3 million at the end of 2024[34]. Operating Expenses - Capital expenditures for the first nine months of 2025 were $55.1 million, compared to $68.4 million in the same period of 2024[29]. - The company incurred other operating expenses of $34.1 million for the first nine months of 2025, significantly higher than $1.8 million in the same period of 2024[29].

STAMFORD, Conn.--(BUSINESS WIRE)--Hexcel Corporation (NYSE: HXL) announced today that the Company's Board of Directors has declared a regular quarterly cash dividend of $0.17 per share on the common stock of Hexcel, payable to stockholders of record as of November 3, 2025, with a payment date of November 10, 2025. About Hexcel Hexcel Corporation is a global leader in advanced lightweight composites technology. We propel the future of flight and transportation through excellence in providing inn. ...

Core Viewpoint - The market anticipates a year-over-year decline in Hexcel's earnings due to lower revenues, with a focus on how actual results compare to estimates [1][2]. Earnings Expectations - Hexcel is expected to report quarterly earnings of $0.39 per share, reflecting a 17% decrease year-over-year [3]. - Revenue projections stand at $450.82 million, indicating a 1.2% decline from the previous year [3]. Estimate Revisions - The consensus EPS estimate has been revised 0.13% higher in the last 30 days, suggesting a slight positive adjustment by analysts [4]. - The Most Accurate Estimate for Hexcel is lower than the Zacks Consensus Estimate, resulting in an Earnings ESP of -5.94%, indicating a bearish outlook from analysts [12]. Earnings Surprise Prediction - The Zacks Earnings ESP model indicates that a positive reading is a strong predictor of an earnings beat, particularly when combined with a Zacks Rank of 1, 2, or 3 [10]. - Hexcel currently holds a Zacks Rank of 3, making it challenging to predict a consensus EPS beat [12]. Historical Performance - In the last reported quarter, Hexcel exceeded earnings expectations by delivering $0.50 per share against an expected $0.46, resulting in a surprise of +8.70% [13]. - Over the past four quarters, Hexcel has beaten consensus EPS estimates three times [14]. Conclusion - While Hexcel does not appear to be a strong candidate for an earnings beat, investors should consider other factors influencing stock performance ahead of the earnings release [17].

Group 1 - Hexcel Corporation (NYSE: HXL) is a key supplier of advanced composite materials for the aerospace and defense industry, showing a gain of approximately 24%, trailing the S&P 500's gain of 27.4% [1] - The Aerospace Forum aims to discover investment opportunities in the aerospace, defense, and airline industry, providing analysis driven by data-informed insights [1] - The investing group offers direct access to data analytics monitors, enhancing the investment research process [1] Group 2 - The article emphasizes the importance of context in understanding developments within the aerospace and defense industry and their potential impact on investment theses [1]