Hexcel Corporation (HXL - Free Report) reported first-quarter 2022 adjusted earnings of 22 cents per share, which exceeded the Zacks Consensus Estimate of 17 cents by 29.4%.
The bottom line also improved from a loss of 10 cents per share incurred in the year-ago quarter.
In the quarter under review, the company posted GAAP earnings of 21 cents against the prior-year quarter’s loss of 17 cents.
Total Sales
Net sales during the first quarter totaled $390.6 million, which beat the Zacks Consensus Estimate of $362 million by 7.9%. Moreover, the top line witnessed an improvement of 25.9% from the year-ago quarter’s $310.3 million.
Operational Update
Hexcel's gross margin for the first quarter was 22.2% compared with 17.1% in the prior-year period, driven by higher sales and greater capacity utilization that led to improved cost absorption.
SG&A expenses rose 12.9%, whereas research and technology expenses for the first quarter of 2022 decreased by 6% year over year.
The company’s adjusted operating income amounted to $31.1 million in the quarter compared with $1.9 million incurred in the year-ago period.
Segmental Performance
Commercial Aerospace: Net sales increased by 48.3% year over year to $218.9 million, driven by higher narrowbody sales, increased Airbus A350 sales and higher business jet sales.
Space and Defense: Net sales increased by 5.8% year over year to $118.2 million. The increase can be attributed to growth in the Space, CH-53K and military jet programs.
Industrial: Net sales increased by 4.9% year over year to $53.5 million, primarily driven by the strength in recreation, consumer electronics and automotive.
Financial Details
As of Mar 31, 2022, cash and cash equivalents were $112.8 million compared with $127.7 million as of Dec 31, 2021.
Long-term debt totaled $857.5 million as of Mar 31, 2022, up from $822.4 million as of 2021-end.
In the first quarter of 2022, cash used in operating activities was $19 million compared with the cash outflow of $1.2 million in the prior year.
Hexcel’s adjusted free cash outflow in the first quarter of 2022 was $123.8 million compared to the free cash outflow of $6.1 million in the prior-year period.
2022 Guidance
The company reaffirmed its 2022 financial guidance.
Hexcel currently expects to generate sales in the range of $1.50-$1.63 billion in 2022. The Zacks Consensus Estimate for sales, pegged at $1.56 billion, is in line with the midpoint of the guidance range.
The company projects to generate adjusted earnings per share (EPS) in the range of $1.00-$1.24 in 2022. The Zacks Consensus Estimate for sales, pegged at $1.16, lies above the midpoint of the guidance range.
Zacks Rank
Hexcel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Lockheed Martin (LMT - Free Report) reported first-quarter 2022 earnings of $6.44 per share, which surpassed the Zacks Consensus Estimate of $6.22 by 3.5%. However, the bottom line declined by 1.8% year over year.
Lockheed Martin ended the first quarter of 2022 (on Mar 27, 2022) with $134.23 billion in the backlog compared with $135.36 billion at the end of the fourth quarter of 2021. LMT’s cash from operations at the end of the first quarter of 2022 amounted to $1.41 billion compared with $1.75 billion a year ago.
Raytheon Technologies’ (RTX - Free Report) first-quarter 2022 adjusted EPS of $1.15 beat the Zacks Consensus Estimate of $1.01 by 13.9%. Its sales of $15,716 million missed the Zacks Consensus Estimate of $15,799 million by 0.5%.
Raytheon Technologies had cash and cash equivalents of $6,040 million as of Mar 31, 2022, compared with $7,832 million as of Dec 31, 2021. RTX projects adjusted EPS in the range of $4.60-$4.80.
Upcoming Release
Spirit Aerosystems (SPR - Free Report) is set to announce its first-quarter results on May 4. Spirit Aerosystems has a Zacks Rank #3. It has a four-quarter average negative earnings surprise of 14.56%.
The long-term earnings growth rate of SPR stands at 8.5%. The Zacks Consensus Estimate for Spirit Aerosystems’ first-quarter sales is pegged at $1.09 billion.
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Hexcel Corporation (HXL - Free Report) reported first-quarter 2022 adjusted earnings of 22 cents per share, which exceeded the Zacks Consensus Estimate of 17 cents by 29.4%.
The bottom line also improved from a loss of 10 cents per share incurred in the year-ago quarter.
In the quarter under review, the company posted GAAP earnings of 21 cents against the prior-year quarter’s loss of 17 cents.
Total Sales
Net sales during the first quarter totaled $390.6 million, which beat the Zacks Consensus Estimate of $362 million by 7.9%. Moreover, the top line witnessed an improvement of 25.9% from the year-ago quarter’s $310.3 million.
Operational Update
Hexcel's gross margin for the first quarter was 22.2% compared with 17.1% in the prior-year period, driven by higher sales and greater capacity utilization that led to improved cost absorption.
SG&A expenses rose 12.9%, whereas research and technology expenses for the first quarter of 2022 decreased by 6% year over year.
The company’s adjusted operating income amounted to $31.1 million in the quarter compared with $1.9 million incurred in the year-ago period.
Segmental Performance
Commercial Aerospace: Net sales increased by 48.3% year over year to $218.9 million, driven by higher narrowbody sales, increased Airbus A350 sales and higher business jet sales.
Space and Defense: Net sales increased by 5.8% year over year to $118.2 million. The increase can be attributed to growth in the Space, CH-53K and military jet programs.
Industrial: Net sales increased by 4.9% year over year to $53.5 million, primarily driven by the strength in recreation, consumer electronics and automotive.
Financial Details
As of Mar 31, 2022, cash and cash equivalents were $112.8 million compared with $127.7 million as of Dec 31, 2021.
Long-term debt totaled $857.5 million as of Mar 31, 2022, up from $822.4 million as of 2021-end.
In the first quarter of 2022, cash used in operating activities was $19 million compared with the cash outflow of $1.2 million in the prior year.
Hexcel’s adjusted free cash outflow in the first quarter of 2022 was $123.8 million compared to the free cash outflow of $6.1 million in the prior-year period.
2022 Guidance
The company reaffirmed its 2022 financial guidance.
Hexcel currently expects to generate sales in the range of $1.50-$1.63 billion in 2022. The Zacks Consensus Estimate for sales, pegged at $1.56 billion, is in line with the midpoint of the guidance range.
The company projects to generate adjusted earnings per share (EPS) in the range of $1.00-$1.24 in 2022. The Zacks Consensus Estimate for sales, pegged at $1.16, lies above the midpoint of the guidance range.
Zacks Rank
Hexcel currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Releases
Lockheed Martin (LMT - Free Report) reported first-quarter 2022 earnings of $6.44 per share, which surpassed the Zacks Consensus Estimate of $6.22 by 3.5%. However, the bottom line declined by 1.8% year over year.
Lockheed Martin ended the first quarter of 2022 (on Mar 27, 2022) with $134.23 billion in the backlog compared with $135.36 billion at the end of the fourth quarter of 2021. LMT’s cash from operations at the end of the first quarter of 2022 amounted to $1.41 billion compared with $1.75 billion a year ago.
Raytheon Technologies’ (RTX - Free Report) first-quarter 2022 adjusted EPS of $1.15 beat the Zacks Consensus Estimate of $1.01 by 13.9%. Its sales of $15,716 million missed the Zacks Consensus Estimate of $15,799 million by 0.5%.
Raytheon Technologies had cash and cash equivalents of $6,040 million as of Mar 31, 2022, compared with $7,832 million as of Dec 31, 2021. RTX projects adjusted EPS in the range of $4.60-$4.80.
Upcoming Release
Spirit Aerosystems (SPR - Free Report) is set to announce its first-quarter results on May 4. Spirit Aerosystems has a Zacks Rank #3. It has a four-quarter average negative earnings surprise of 14.56%.
The long-term earnings growth rate of SPR stands at 8.5%. The Zacks Consensus Estimate for Spirit Aerosystems’ first-quarter sales is pegged at $1.09 billion.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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