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Why Is Hexcel (HXL) Down 9.5% Since Last Earnings Report?
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It has been about a month since the last earnings report for Hexcel (HXL - Free Report) . Shares have lost about 9.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hexcel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Hexcel Reports Loss in Q1, Beats Revenue Estimates
Hexcel Corporation reported first-quarter 2021 adjusted loss of 10 cents per share, which was narrower than the Zacks Consensus Estimate’s loss of 16 cents.
In the reported quarter, the company’s GAAP losses came in at 17 cents against the prior-year quarter’s GAAP earnings of 50 cents.
Total Sales
Net sales totaled $310.3 million, surpassing the Zacks Consensus Estimate of $298 million by 4.1%.
However, the top line witnessed a decline of 42.6% from the year-ago quarter’s $541 million. Both the company’s Commercial Aerospace and Industrial segment registered year-over-year decline in sales.
Operational Update
Hexcel's gross margin for the first quarter was 17.1% compared to 26% in the prior year period.
Adjusted operating income in the first quarter of 2021 was $1.9 million, or 0.6% of sales, compared to adjusted operating income of $80.4 million, or 14.9% of sales in 2020.
Quarterly Performance
Commercial Aerospace: Net sales plunged 59.3% year over year to $147.6 million. The decline in the segment’s sale reflected pandemic-induced build rate reductions by the aircraft OEMs and continued supply chain destocking.
Space and Defense: Net sales remained unchanged year over year at $111.7 million.
Industrial: Net sales declined 23.3% year over year to $51 million, primarily due to soft wind energy sales on account of lower demand and the cessation of sales in North America.
Financial Details
As of Mar 31, 2021, cash and cash equivalents were $82 million compared with $103.3 million as of Dec 31, 2020.
Long-term debt totaled $912 million as of Mar 31, 2021, up from $925.5 million as of 2020-end.
At the end of first-quarter 2021, cash used in operating activities was $1.2 million compared to the $8.6 million cash generated in the prior year period.
The effective tax rate for the first quarter of 2021 was a 36.8% benefit compared to a 21.9% charge in the first quarter of 2020.
Free cash outflow for the first quarter of 2021 was $6.1 million compared with $18.6 million in the first quarter of 2020.
2021 Guidance
Hexcel continues to withhold its financial guidance due to the market uncertainties arising from the global pandemic.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 118.46% due to these changes.
VGM Scores
Currently, Hexcel has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hexcel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is Hexcel (HXL) Down 9.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Hexcel (HXL - Free Report) . Shares have lost about 9.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hexcel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Hexcel Reports Loss in Q1, Beats Revenue Estimates
Hexcel Corporation reported first-quarter 2021 adjusted loss of 10 cents per share, which was narrower than the Zacks Consensus Estimate’s loss of 16 cents.
In the reported quarter, the company’s GAAP losses came in at 17 cents against the prior-year quarter’s GAAP earnings of 50 cents.
Total Sales
Net sales totaled $310.3 million, surpassing the Zacks Consensus Estimate of $298 million by 4.1%.
However, the top line witnessed a decline of 42.6% from the year-ago quarter’s $541 million. Both the company’s Commercial Aerospace and Industrial segment registered year-over-year decline in sales.
Operational Update
Hexcel's gross margin for the first quarter was 17.1% compared to 26% in the prior year period.
Adjusted operating income in the first quarter of 2021 was $1.9 million, or 0.6% of sales, compared to adjusted operating income of $80.4 million, or 14.9% of sales in 2020.
Quarterly Performance
Commercial Aerospace: Net sales plunged 59.3% year over year to $147.6 million. The decline in the segment’s sale reflected pandemic-induced build rate reductions by the aircraft OEMs and continued supply chain destocking.
Space and Defense: Net sales remained unchanged year over year at $111.7 million.
Industrial: Net sales declined 23.3% year over year to $51 million, primarily due to soft wind energy sales on account of lower demand and the cessation of sales in North America.
Financial Details
As of Mar 31, 2021, cash and cash equivalents were $82 million compared with $103.3 million as of Dec 31, 2020.
Long-term debt totaled $912 million as of Mar 31, 2021, up from $925.5 million as of 2020-end.
At the end of first-quarter 2021, cash used in operating activities was $1.2 million compared to the $8.6 million cash generated in the prior year period.
The effective tax rate for the first quarter of 2021 was a 36.8% benefit compared to a 21.9% charge in the first quarter of 2020.
Free cash outflow for the first quarter of 2021 was $6.1 million compared with $18.6 million in the first quarter of 2020.
2021 Guidance
Hexcel continues to withhold its financial guidance due to the market uncertainties arising from the global pandemic.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates review. The consensus estimate has shifted 118.46% due to these changes.
VGM Scores
Currently, Hexcel has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, 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 D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Hexcel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.