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Aggressive Growth

Hexcel Corp. (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.

Company Description

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.

Bullish Outlook

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.

The Chart

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.

Hexcel Corp. - ticker HXL>


Bill Wilton is the Aggressive Growth Stock Strategist for He is also the Editor in charge of the Zacks Small Cap Trader service