Hexcel(US:HXL)2025-10-22 20:30Financial 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].