It has been about a month since the last earnings report for Hexcel (
HXL Quick Quote HXL - Free Report) . Shares have added about 10.4% 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 the most recent earnings report in order to get a better handle on the important drivers.
Hexcel Q4 Earnings and Revenues Top Estimates
Hexcel reported fourth-quarter 2021 adjusted earnings of 16 cents per share, which exceeded the Zacks Consensus Estimate of 12 cents by 33.3%.
The bottom line also improved from a loss of 18 cents per share incurred in the year-ago quarter.
In the quarter under review, the company posted GAAP earnings of 22 cents against the prior-year quarter’s loss figure of 23 cents.
For full-year 2021, Hexcel posted adjusted earnings of 27 cents per share, which exceeded the Zacks Consensus Estimate of 23 cents by 17.4%. The bottom line also improved 8% from the year-ago figure.
Net sales during the fourth quarter totaled $360.3 million, which beat the Zacks Consensus Estimate of $342 million by 5.5%. Moreover, the top line witnessed an improvement of 21.8% from the year-ago quarter’s $295.8 million.
For full-year 2021, the company generated sales worth $1.33 billion, which beat the Zacks Consensus Estimate of $1.32 billion by 0.8%. Moreover, the top line witnessed a decline of 11.8% from the year-ago quarter’s $1.50 billion.
Hexcel's gross margin for the fourth quarter was 19.2% compared with 10.3% in the prior-year period, driven by increased sales.
Selling, general and administrative expenses rose 24.7%, whereas research and technology expenses for the fourth quarter of 2021 increased 9.4% year over year.
The company’s adjusted operating income amounted to $25.2 million in the quarter against an adjusted operating loss of $6.1 million incurred in the year-ago period.
Commercial Aerospace: Net sales increased 57.6% year over year to $199.7 million, driven by higher narrowbody sales, increased Airbus A350 sales and higher business jet sales.
Space and Defense: Net sales declined 11.5% year over year to $105.9 million. The decrease can be attributed to lower military and civilian rotorcraft sales and lower Space sales.
Industrial: Net sales increased 10.7% year over year to $54.7 million, primarily driven by strength in the automotive and recreation markets as well as other industrial markets.
As of Dec 31, 2021, cash and cash equivalents were $127.7 million compared with $103.3 million as of Dec 31, 2020.
Long-term debt totaled $822.4 million as of Dec 31, 2021, down from $925.5 million as of 2020-end.
At the end of 2021, cash generated from operating activities was $151.7 million compared with $264.3 million in the prior year.
Hexcel’s adjusted free cash outflow at the end of 2021 was $123.8 million compared with $213.7 million at the end of 2020.
The company provided its 2022 financial guidance.
Hexcel currently expects to generate sales in the range of $1.50-$1.63 billion during 2022. The Zacks Consensus Estimate for sales, pegged at $1.59 billion, lies above the mid-point of the guidance range.
The company projects to generate adjusted earnings per share in the range of $1.00-$1.24 in 2022. The Zacks Consensus Estimate for sales, pegged at $1.34, lies above the guidance range.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
The consensus estimate has shifted -46.43% due to these changes.
At this time, Hexcel has a strong Growth Score of A, 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 B. If you aren't focused on one strategy, this score is the one you should be interested in.
Hexcel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.