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 ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended June 30, 2024 or ☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from to Commission File Number 1-8472 Hexcel Corporation (Exact name of registrant as specified in its charter) (State or Other Jurisdiction of Incorporation or Organization) ...

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | |---------------------------------------------------------------------------------------------|-------|------------------|-------|---------|---------------------------|-------|--------------------|-------|------------------------------------------|-------|-------------------------------------|----------------------| | 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 ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section provides the company's unaudited financial statements and management's discussion for the first quarter of 2024 [Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=ITEM%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) Hexcel's unaudited Q1 2024 financial statements show increased net sales but decreased operating and net income year-over-year [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2024, total assets decreased to **$2,821.2 million**, primarily due to reduced cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (in millions) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $85.9 | $227.0 | | Total current assets | $789.7 | $864.2 | | Total assets | $2,821.2 | $2,918.5 | | **Liabilities & Equity** | | | | Total current liabilities | $288.6 | $315.9 | | Long-term debt | $714.6 | $699.4 | | Total liabilities | $1,189.1 | $1,202.0 | | Total stockholders' equity | $1,632.1 | $1,716.5 | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Q1 2024 net sales increased to **$472.3 million**, but operating income decreased to **$52.9 million** due to lower gross margin Q1 2024 vs. Q1 2023 Statement of Operations (in millions, except per share data) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net sales | $472.3 | $457.7 | | Gross margin | $118.2 | $127.7 | | Operating income | $52.9 | $62.8 | | Net income | $36.5 | $42.7 | | Diluted net income per common share | $0.43 | $0.50 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used for operating activities improved to **$7.0 million** in Q1 2024, but significant share repurchases led to a **$141.1 million** net cash decrease Cash Flow Summary for Three Months Ended March 31 (in millions) | Cash Flow Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash used for operating activities | $(7.0) | $(23.4) | | Net cash used for investing activities | $(28.7) | $(18.1) | | Net cash (used for) provided by financing activities | $(104.3) | $34.8 | | **Net decrease in cash and cash equivalents** | **$(141.1)** | **$(6.3)** | - The company repurchased **$100.7 million** of common stock in Q1 2024, compared to none in Q1 2023[15](index=15&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) Detailed notes explain accounting policies, segment performance, debt, derivatives, contingencies, and share repurchase programs Total Debt Composition (in millions) | Debt Component | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Senior unsecured credit facility | $15.0 | - | | 4.7% senior notes due 2025 | $300.0 | $300.0 | | 3.95% senior notes due 2027 | $400.0 | $400.0 | | **Total debt** | **$714.7** | **$699.5** | - As of March 31, 2024, the company had **$735.0 million** in undrawn availability under its **$750 million** senior unsecured credit facility[32](index=32&type=chunk) - In February 2024, the Board approved a new **$300 million** share repurchase plan, supplementing the existing 2018 plan During Q1 2024, the company repurchased **1,397,755 shares** for **$100.7 million**[69](index=69&type=chunk)[70](index=70&type=chunk) - The company is involved in environmental litigation related to the Lower Passaic River A Consent Decree for a **$150 million** settlement involving Hexcel and 83 other parties was lodged with the court in December 2022, but approval is pending[60](index=60&type=chunk)[63](index=63&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=25&type=section&id=ITEM%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Q1 2024 financial results, noting increased net sales driven by aerospace, but a decline in operating income due to lower gross margin [Results of Operations](index=25&type=section&id=Results%20of%20Operations) Q1 2024 net sales increased **3.2%** to **$472.3 million**, driven by aerospace, but operating income declined **15.8%** due to lower gross margin Q1 2024 Financial Highlights vs. Q1 2023 (in millions) | Metric | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $472.3 | $457.7 | 3.2% | | Operating income | $52.9 | $62.8 | (15.8)% | | Net income | $36.5 | $42.7 | (14.5)% | Net Sales by Market (in millions) | Market | Q1 2024 | Q1 2023 | % Change | | :--- | :--- | :--- | :--- | | Commercial Aerospace | $299.3 | $284.5 | 5.2% | | Space & Defense | $139.1 | $126.2 | 10.2% | | Industrial | $33.9 | $47.0 | (27.9)% | - Commercial Aerospace growth was driven by strong **Boeing 787** sales, while Space & Defense strength came from the **F-35** and **A400M** programs The Industrial sales decline was broad-based across all sub-markets[84](index=84&type=chunk)[85](index=85&type=chunk) - Gross margin fell to **25.0%** in Q1 2024 from **27.9%** in Q1 2023, as the prior year benefited from a more favorable sales mix and absorption[87](index=87&type=chunk) [Financial Condition and Liquidity](index=28&type=section&id=Financial%20Condition%20and%20Liquidity) Q1 2024 saw a significant decrease in cash to **$85.9 million** due to share repurchases, though liquidity is supported by credit facility availability - Cash on hand was **$85.9 million** at March 31, 2024, down from **$227.0 million** at December 31, 2023[96](index=96&type=chunk) - Net cash used for operating activities was **$7.0 million**, an improvement from a **$23.4 million** use in Q1 2023, primarily due to better working capital management[100](index=100&type=chunk) - Financing activities used **$104.3 million**, dominated by **$100.7 million** in share repurchases and **$12.6 million** in dividend payments[102](index=102&type=chunk) - The company has no significant required debt repayments until August 2025 The Board declared a quarterly dividend of **$0.15 per share** in April 2024[98](index=98&type=chunk)[99](index=99&type=chunk) [Non-GAAP Financial Measures](index=31&type=section&id=Non-GAAP%20Financial%20Measures) Non-GAAP measures for Q1 2024 show adjusted operating income of **$54.1 million** and negative free cash flow of **$(35.7) million** Reconciliation of GAAP to Adjusted Net Income (in millions, except per share) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | GAAP net income | $36.5 | $42.7 | | Other operating expense, net of tax | $0.9 | $0.2 | | **Adjusted net income (non-GAAP)** | **$37.4** | **$42.9** | | GAAP diluted net income per share | $0.43 | $0.50 | | **Adjusted diluted net income per share (non-GAAP)** | **$0.44** | **$0.50** | Free Cash Flow (non-GAAP, in millions) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net cash used for operating activities | $(7.0) | $(23.4) | | Less: Capital expenditures | $(28.7) | $(18.1) | | **Free cash flow (non-GAAP)** | **$(35.7)** | **$(41.5)** | [Quantitative and Qualitative Disclosures About Market Risk](index=34&type=section&id=ITEM%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) No material changes in market risk have occurred since the 2023 Annual Report on Form 10-K - There were no material changes in market risk since the 2023 year-end report[115](index=115&type=chunk) [Controls and Procedures](index=34&type=section&id=ITEM%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal controls - The CEO and CFO concluded that disclosure controls and procedures were effective as of March 31, 2024[116](index=116&type=chunk) - No changes in internal control over financial reporting occurred in Q1 2024 that have materially affected, or are reasonably likely to materially affect, internal controls[117](index=117&type=chunk) [PART II. OTHER INFORMATION](index=34&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information on legal proceedings, risk factors, equity sales, and exhibits [Legal Proceedings](index=34&type=section&id=ITEM%201.%20Legal%20Proceedings) Information on legal proceedings, including the Lower Passaic River matter, is incorporated by reference from Note 11 of the financial statements - Information regarding legal proceedings is incorporated by reference from Note 11 of the financial statements[118](index=118&type=chunk) [Risk Factors](index=34&type=section&id=ITEM%201A.%20Risk%20Factors) No material changes to the company's risk factors have occurred since the 2023 Annual Report on Form 10-K - There have been no material changes in the Company's risk factors from the 2023 Form 10-K[119](index=119&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=ITEM%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) In Q1 2024, Hexcel repurchased **1,397,755 shares** for **$100.7 million** under its augmented share repurchase programs - On February 19, 2024, the Board approved a new **$300 million** share repurchase plan[120](index=120&type=chunk) Share Repurchase Activity for Q1 2024 | Period | Total Shares Purchased | Average Price Paid per share | Total Cost (Millions) | | :--- | :--- | :--- | :--- | | Feb 1 - Feb 29, 2024 | 1,233,912 | $71.10 | ~$87.7 | | Mar 1 - Mar 31, 2024 | 163,843 | $74.86 | ~$12.3 | | **Total Q1 2024** | **1,397,755** | **$71.54** | **$100.7** | - As of March 31, 2024, approximately **$386.4 million** remained available for repurchases under the company's Share Repurchase Program[121](index=121&type=chunk) [Exhibits](index=36&type=section&id=ITEM%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including executive agreements, SOX certifications, and Inline XBRL financial data - Exhibits filed include transition and employment agreements for executive officers, Sarbanes-Oxley certifications, and Inline XBRL data files[125](index=125&type=chunk)