(HXL - Snapshot Report
) moved to a Zacks #1 Rank (Strong Buy) after estimates jumped on a recent earnings surprise.
The company has a strong earnings history and is showing stronger than expected growth rates.
Hexcel Corp makes composites for lightweight, high-performance structural materials. Their products are used in for aerospace and industrials applications.
Beat by a Nickel
The company announced better-than-expected results on Apr 25 that included a 26% jump in net sales, to $332 million. Growth was driven buy new programs in commercial aerospace, but other segments increased as well.
Operating income almost doubled, from $23.8 million to $27.2 million. That led to earnings per share of $0.25, which was 5 cents higher than the Zacks Consensus Estimate. Hexcel has topped expectations in 5 of the past 6 quarters.
In the same press release, Hexcel raised its sales and earnings forecast. Analysts quickly followed suit, pushing the Zacks Consensus Estimate for 2011 to $1,94, from $0.95. Next year's average projection rose 8 cents, to $1.26.
Given the $0.78 they earned in 2010, the projected growth rates are now 34% for this year and 20% for next year. Long-term expectations are calling for an annualized 15% growth rate.
Shares of HXL are a bit volatile and are at the whim of the general economic recovery, given their capital-intensive area of business. But you can see below that the stock has done pretty well, with the latest jump coming on the earnings surprise.
Bill Wilton is the Aggressive Growth Stock Strategist for Zacks.com. He is also the Editor in charge of the Zacks Small Cap Trader service