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Hexcel Corporation (HXL - Free Report) reported second-quarter 2024 earnings of 60 cents per share, which improved 20% from the year-ago quarter’s figure of 50 cents.
The Zacks Consensus Estimate for HXL’s second-quarter earnings is pegged at 55 cents.
Total Sales
In the second quarter, the company’s net sales totaled $500.4 million, which beat the Zacks Consensus Estimate of $482 million by 3.8%. The top line witnessed an improvement of 10.1% from the year-ago quarter’s reported sales of $454.3 million.
The year-over-year improvement can be attributed to sales growth from Commercial Aerospace as well as Space & Defense markets.
Hexcel Corporation Price, Consensus and EPS Surprise
Hexcel's gross margin in the second quarter was 25.3%, which increased 90 basis points from the prior-year quarter’s period. The improvement in the gross margin can be attributed to favorable cost leverage driven by higher sales.
Selling, general and administrative (SG&A) expenses increased 11.8% year over year to $39.9 million in the second quarter. Meanwhile, research and technology expenses for the second quarter of 2024 rose 10.5% year over year to $14.7 million.
HXL’s adjusted operating income was $72 million in the quarter compared with $61.8 million in the year-ago period.
Market Performance
Commercial Aerospace: Net sales increased 21.3% year over year to $320.7 million, driven by widebody and narrowbody sales growth.
Space and Defense: Net sales rose 1% year over year to $138.9 million. This increase was led by strong sales volume from military helicopters globally, including the CH-53K and Apache.
Industrial: Net sales decreased 22.3% year over year to $40.8 million due to a decline in other sub-markets.
Financial Details
As of Jun 30, 2024, Hexcel’s cash and cash equivalents were $75.4 million compared with $227 million as of Dec 31, 2023.
The company’s long-term debt totaled $794.9 million as of Jun 30, 2024, up from $699.4 million as of 2023-end.
In the first six months of 2024, HXL’s cash flow from operating activities was $37.2 million compared with cash flow worth $30.1 million in the year-ago period.
Hexcel’s adjusted free cash outflow as of Jun 30, 2024 was $14.4 million compared with free cash outflow of $44.7 million in the year-ago period.
Guidance
Hexcel partially lowered its guidance for 2024. The company now expects to generate sales in the band of $1.90-$1.98 billion in 2024 compared to the previous band of $1.93-$2.03 billion. The Zacks Consensus Estimate, pegged at $1.94 billion, is in line with the midpoint of the company's guidance.
HXL now expects its adjusted earnings per share in the range of $2.02-$2.18 in 2024, lower than its prior guidance band of $2.10-$2.30. The Zacks Consensus Estimate, pegged at $2.15 per share, is higher than the midpoint of the company’s guided range.
Hexcel now expects to generate free cash flow of approximately $200 million in 2024 compared to the prior guidance of more than $200 million. Its capital expenditure outlook still remains less than $100 million.
AAR Corp. (AIR - Free Report) reported fourth-quarter fiscal 2024 adjusted earnings of 88 cents per share, which surpassed the Zacks Consensus Estimate of 86 cents by 2.3%. The bottom line improved 6% from the year-ago quarter’s level.
AAR generated net sales of $656.5 million. The reported figure missed the Zacks Consensus Estimate of $660 million by 0.6% but increased 18.7% from $553.3 million recorded in the year-ago quarter.
Textron Inc. (TXT - Free Report) reported second-quarter 2024 adjusted earnings of $1.54 per share, which surpassed the Zacks Consensus Estimate of $1.49 by 3.4%. The bottom line also improved 5.5% from the year-ago quarter’s figure of $1.46 per share.
TXT reported total revenues of $3.53 billion, which missed the Zacks Consensus Estimate of $3.55 billion by 0.6%. However, the reported figure increased 3% from the year-ago quarter’s level of $3.42 billion.
Upcoming Q2 Defense Release
Northrop Grumman (NOC - Free Report) is scheduled to report second-quarter 2024 results on Jul 25 before market open. The Zacks Consensus Estimate for Northrop Grumman’s second-quarter earnings is pegged at $5.95 per share, which calls for an increase of 11.4% from the prior year quarter’s reported figure.
The Zacks Consensus Estimate for NOC’s second-quarter sales is pegged at $10.07 billion, which implies an improvement of 5.2% from the prior-year quarter’s reported figure.
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Hexcel's (HXL) Q2 Earnings Increase Y/Y, Sales View Lowered
Hexcel Corporation (HXL - Free Report) reported second-quarter 2024 earnings of 60 cents per share, which improved 20% from the year-ago quarter’s figure of 50 cents.
The Zacks Consensus Estimate for HXL’s second-quarter earnings is pegged at 55 cents.
Total Sales
In the second quarter, the company’s net sales totaled $500.4 million, which beat the Zacks Consensus Estimate of $482 million by 3.8%. The top line witnessed an improvement of 10.1% from the year-ago quarter’s reported sales of $454.3 million.
The year-over-year improvement can be attributed to sales growth from Commercial Aerospace as well as Space & Defense markets.
Hexcel Corporation Price, Consensus and EPS Surprise
Hexcel Corporation price-consensus-eps-surprise-chart | Hexcel Corporation Quote
Operational Update
Hexcel's gross margin in the second quarter was 25.3%, which increased 90 basis points from the prior-year quarter’s period. The improvement in the gross margin can be attributed to favorable cost leverage driven by higher sales.
Selling, general and administrative (SG&A) expenses increased 11.8% year over year to $39.9 million in the second quarter. Meanwhile, research and technology expenses for the second quarter of 2024 rose 10.5% year over year to $14.7 million.
HXL’s adjusted operating income was $72 million in the quarter compared with $61.8 million in the year-ago period.
Market Performance
Commercial Aerospace: Net sales increased 21.3% year over year to $320.7 million, driven by widebody and narrowbody sales growth.
Space and Defense: Net sales rose 1% year over year to $138.9 million. This increase was led by strong sales volume from military helicopters globally, including the CH-53K and Apache.
Industrial: Net sales decreased 22.3% year over year to $40.8 million due to a decline in other sub-markets.
Financial Details
As of Jun 30, 2024, Hexcel’s cash and cash equivalents were $75.4 million compared with $227 million as of Dec 31, 2023.
The company’s long-term debt totaled $794.9 million as of Jun 30, 2024, up from $699.4 million as of 2023-end.
In the first six months of 2024, HXL’s cash flow from operating activities was $37.2 million compared with cash flow worth $30.1 million in the year-ago period.
Hexcel’s adjusted free cash outflow as of Jun 30, 2024 was $14.4 million compared with free cash outflow of $44.7 million in the year-ago period.
Guidance
Hexcel partially lowered its guidance for 2024. The company now expects to generate sales in the band of $1.90-$1.98 billion in 2024 compared to the previous band of $1.93-$2.03 billion. The Zacks Consensus Estimate, pegged at $1.94 billion, is in line with the midpoint of the company's guidance.
HXL now expects its adjusted earnings per share in the range of $2.02-$2.18 in 2024, lower than its prior guidance band of $2.10-$2.30. The Zacks Consensus Estimate, pegged at $2.15 per share, is higher than the midpoint of the company’s guided range.
Hexcel now expects to generate free cash flow of approximately $200 million in 2024 compared to the prior guidance of more than $200 million. Its capital expenditure outlook still remains less than $100 million.
Zacks Rank
Hexcel currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
AAR Corp. (AIR - Free Report) reported fourth-quarter fiscal 2024 adjusted earnings of 88 cents per share, which surpassed the Zacks Consensus Estimate of 86 cents by 2.3%. The bottom line improved 6% from the year-ago quarter’s level.
AAR generated net sales of $656.5 million. The reported figure missed the Zacks Consensus Estimate of $660 million by 0.6% but increased 18.7% from $553.3 million recorded in the year-ago quarter.
Textron Inc. (TXT - Free Report) reported second-quarter 2024 adjusted earnings of $1.54 per share, which surpassed the Zacks Consensus Estimate of $1.49 by 3.4%. The bottom line also improved 5.5% from the year-ago quarter’s figure of $1.46 per share.
TXT reported total revenues of $3.53 billion, which missed the Zacks Consensus Estimate of $3.55 billion by 0.6%. However, the reported figure increased 3% from the year-ago quarter’s level of $3.42 billion.
Upcoming Q2 Defense Release
Northrop Grumman (NOC - Free Report) is scheduled to report second-quarter 2024 results on Jul 25 before market open. The Zacks Consensus Estimate for Northrop Grumman’s second-quarter earnings is pegged at $5.95 per share, which calls for an increase of 11.4% from the prior year quarter’s reported figure.
The Zacks Consensus Estimate for NOC’s second-quarter sales is pegged at $10.07 billion, which implies an improvement of 5.2% from the prior-year quarter’s reported figure.