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Why Is Hexcel (HXL) Up 13.5% Since Last Earnings Report?
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A month has gone by since the last earnings report for Hexcel (HXL - Free Report) . Shares have added about 13.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hexcel due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hexcel Reports Loss in Q4, Misses Revenue Estimates
Hexcel Corporation reported fourth-quarter 2020 loss of 18 cents per share in line with the Zacks Consensus Estimate. The bottom line however declined from the prior-year quarter’s earnings per share of 86 cents. The year-over-year downside can be attributed to poor sales figures.
The company reported GAAP losses of 23 cents per share against the year-ago quarter’s earnings of 86 cents.
For 2020, Hexcel's earnings were 25 cents per share, down 92.9% from $3.54 in the year-ago period. The full-year earnings figure missed the Zacks Consensus Estimate of 26 cents by 4%.
Total Sales
Net sales totaled $295.8 million, missing the Zacks Consensus Estimate of $297 million by 0.4%. Moreover, the top line witnessed a decline of 47.6% from the year-ago quarter’s $564.3 million.
The year-over-year deterioration in sales can be primarily attributed to the impacts of the pandemic, leading to an unprecedented decline in demand, affecting the aerospace industry.
In 2020, total revenues declined 36.2% year over year to $1,502.4 million. Moreover, the full-year revenues figure missed the Zacks Consensus Estimate of $1,510 million by 35.9%.
Operational Update
Hexcel’s gross margin was 10.3% in the fourth quarter compared to the year-ago quarter’s gross margin of 26%.
The company’s operating expenses amounted to $50.8 million in the fourth quarter compared with the year-ago quarter’s $49.1 million.
Quarterly Performance
Commercial Aerospace: Net sales were down 66.6% year over year to $126.7 million. Lower sales across all major programs, with the Airbus A350 generating the largest quarterly revenue decline, resulted in this unit’s poor top-line performance.
Space and Defense: Net sales were up 3.8% year over year to $119.7 million due to strength in U.S. military rotorcraft programs.
Industrial: Net sales declined 28.6% year over year to $49.4 million, primarily due to lower wind energy sales on account of a customer demand shift, primarily in the U.S. market, and also includes the impact of the November 2020 closure of Hexcel’s wind energy prepreg production facility in Windsor, Colorado.
Financial Details
As of Dec 31, 2020, cash and cash equivalents were $103.3 million compared with $64.4 million as of Dec 31, 2019.
Long-term debt totaled $925.5 million as of Dec 31, 2020, down from $1,050.6 million as of Dec 31, 2019.
At the end of fourth-quarter 2020, cash generated from operating activities summed $264.3 million compared with $491.1 million generated at the end of fourth-quarter 2019.
2021 Guidance
Hexcel continues to withhold its financial guidance in the wake of the ongoing market uncertainties as a result of the pandemic.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -28% due to these changes.
VGM Scores
Currently, Hexcel has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Hexcel has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is Hexcel (HXL) Up 13.5% Since Last Earnings Report?
A month has gone by since the last earnings report for Hexcel (HXL - Free Report) . Shares have added about 13.5% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Hexcel due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hexcel Reports Loss in Q4, Misses Revenue Estimates
Hexcel Corporation reported fourth-quarter 2020 loss of 18 cents per share in line with the Zacks Consensus Estimate. The bottom line however declined from the prior-year quarter’s earnings per share of 86 cents. The year-over-year downside can be attributed to poor sales figures.
The company reported GAAP losses of 23 cents per share against the year-ago quarter’s earnings of 86 cents.
For 2020, Hexcel's earnings were 25 cents per share, down 92.9% from $3.54 in the year-ago period. The full-year earnings figure missed the Zacks Consensus Estimate of 26 cents by 4%.
Total Sales
Net sales totaled $295.8 million, missing the Zacks Consensus Estimate of $297 million by 0.4%. Moreover, the top line witnessed a decline of 47.6% from the year-ago quarter’s $564.3 million.
The year-over-year deterioration in sales can be primarily attributed to the impacts of the pandemic, leading to an unprecedented decline in demand, affecting the aerospace industry.
In 2020, total revenues declined 36.2% year over year to $1,502.4 million. Moreover, the full-year revenues figure missed the Zacks Consensus Estimate of $1,510 million by 35.9%.
Operational Update
Hexcel’s gross margin was 10.3% in the fourth quarter compared to the year-ago quarter’s gross margin of 26%.
The company’s operating expenses amounted to $50.8 million in the fourth quarter compared with the year-ago quarter’s $49.1 million.
Quarterly Performance
Commercial Aerospace: Net sales were down 66.6% year over year to $126.7 million. Lower sales across all major programs, with the Airbus A350 generating the largest quarterly revenue decline, resulted in this unit’s poor top-line performance.
Space and Defense: Net sales were up 3.8% year over year to $119.7 million due to strength in U.S. military rotorcraft programs.
Industrial: Net sales declined 28.6% year over year to $49.4 million, primarily due to lower wind energy sales on account of a customer demand shift, primarily in the U.S. market, and also includes the impact of the November 2020 closure of Hexcel’s wind energy prepreg production facility in Windsor, Colorado.
Financial Details
As of Dec 31, 2020, cash and cash equivalents were $103.3 million compared with $64.4 million as of Dec 31, 2019.
Long-term debt totaled $925.5 million as of Dec 31, 2020, down from $1,050.6 million as of Dec 31, 2019.
At the end of fourth-quarter 2020, cash generated from operating activities summed $264.3 million compared with $491.1 million generated at the end of fourth-quarter 2019.
2021 Guidance
Hexcel continues to withhold its financial guidance in the wake of the ongoing market uncertainties as a result of the pandemic.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review. The consensus estimate has shifted -28% due to these changes.
VGM Scores
Currently, Hexcel has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of this revision indicates a downward shift. It's no surprise Hexcel has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.