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Hexcel (HXL) Up 4.9% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Hexcel (HXL - Free Report) . Shares have added about 4.9% in that time frame, underperforming 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 Q2 Earnings Beat Estimates, Sales Rise Y/Y
Hexcel Corporationreported second-quarter 2022 adjusted earnings of 33 cents per share, which exceeded the Zacks Consensus Estimate of 30 cents by 10%.
The bottom line improved massively from the year-ago earnings of 8 cents per share, thus reflecting growth of a solid 312.5%.
In the quarter under review, the company posted GAAP earnings of 53 cents compared with the prior-year quarter’s earnings of 3 cents per share, reflecting an improvement of a whopping 1,666.7%.
Total Sales
In the second quarter, net sales totaled $393 million, which beat the Zacks Consensus Estimate of $383 million by 2.6%. Moreover, the top line witnessed an improvement of 22.7% from the year-ago quarter’s $320.3 million.
Operational Update
Hexcel's gross margin for the second quarter was 22.8% compared with 19.3% in the prior-year period, driven by higher sales.
SG&A expenses rose 7.7%, whereas research and technology expenses for the second quarter of 2022 decreased 1.5% year over year.
HXL’s adjusted operating income amounted to $44.7 million in the quarter compared with the $19.3 million incurred in the year-ago period.
Segmental Performance
Commercial Aerospace: Net sales increased 48.1% year over year to $227.6 million, driven by growth in the A350, A320neo and 737 MAX programs.
Space and Defense: Net sales increased 4.7% year over year to $111.9 million. The increase can be attributed to growth in the Space, CH-53K and military jet programs.
Industrial: Net sales decreased 10.4% year over year to $53.5 million, primarily due to lower wind energy sales and the negative impact of foreign exchange.
Financial Details
As of Jun 30, 2022, cash and cash equivalents were $99.2 million compared with $127.7 million as of Dec 31, 2021.
Long-term debt totaled $812 million as of Jun 30, 2022, slightly down from $822.4 million as of 2021-end.
In the second quarter of 2022, cash flow from operating activities was $18.3 million compared with $38.9 million in the prior-year period.
Hexcel’s adjusted free cash outflow for the six months ended Jun 30, 2022 was $19.6 million compared to the free cash inflow of $29.7 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 in the range of $1.00-$1.24 in 2022. The Zacks Consensus Estimate for sales, pegged at $1.20, is higher than the midpoint of the guidance range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Hexcel has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. 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.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Hexcel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Hexcel is part of the Zacks Aerospace - Defense Equipment industry. Over the past month, AAR (AIR - Free Report) , a stock from the same industry, has gained 7.1%. The company reported its results for the quarter ended May 2022 more than a month ago.
AAR reported revenues of $476.1 million in the last reported quarter, representing a year-over-year change of +8.8%. EPS of $0.72 for the same period compares with $0.47 a year ago.
For the current quarter, AAR is expected to post earnings of $0.58 per share, indicating a change of +11.5% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for AAR. Also, the stock has a VGM Score of A.
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Hexcel (HXL) Up 4.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Hexcel (HXL - Free Report) . Shares have added about 4.9% in that time frame, underperforming 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 Q2 Earnings Beat Estimates, Sales Rise Y/Y
Hexcel Corporationreported second-quarter 2022 adjusted earnings of 33 cents per share, which exceeded the Zacks Consensus Estimate of 30 cents by 10%.
The bottom line improved massively from the year-ago earnings of 8 cents per share, thus reflecting growth of a solid 312.5%.
In the quarter under review, the company posted GAAP earnings of 53 cents compared with the prior-year quarter’s earnings of 3 cents per share, reflecting an improvement of a whopping 1,666.7%.
Total Sales
In the second quarter, net sales totaled $393 million, which beat the Zacks Consensus Estimate of $383 million by 2.6%. Moreover, the top line witnessed an improvement of 22.7% from the year-ago quarter’s $320.3 million.
Operational Update
Hexcel's gross margin for the second quarter was 22.8% compared with 19.3% in the prior-year period, driven by higher sales.
SG&A expenses rose 7.7%, whereas research and technology expenses for the second quarter of 2022 decreased 1.5% year over year.
HXL’s adjusted operating income amounted to $44.7 million in the quarter compared with the $19.3 million incurred in the year-ago period.
Segmental Performance
Commercial Aerospace: Net sales increased 48.1% year over year to $227.6 million, driven by growth in the A350, A320neo and 737 MAX programs.
Space and Defense: Net sales increased 4.7% year over year to $111.9 million. The increase can be attributed to growth in the Space, CH-53K and military jet programs.
Industrial: Net sales decreased 10.4% year over year to $53.5 million, primarily due to lower wind energy sales and the negative impact of foreign exchange.
Financial Details
As of Jun 30, 2022, cash and cash equivalents were $99.2 million compared with $127.7 million as of Dec 31, 2021.
Long-term debt totaled $812 million as of Jun 30, 2022, slightly down from $822.4 million as of 2021-end.
In the second quarter of 2022, cash flow from operating activities was $18.3 million compared with $38.9 million in the prior-year period.
Hexcel’s adjusted free cash outflow for the six months ended Jun 30, 2022 was $19.6 million compared to the free cash inflow of $29.7 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 in the range of $1.00-$1.24 in 2022. The Zacks Consensus Estimate for sales, pegged at $1.20, is higher than the midpoint of the guidance range.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
VGM Scores
At this time, Hexcel has a nice Growth Score of B, however its Momentum Score is doing a bit better with an A. 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.
Outlook
Estimates have been trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Hexcel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Hexcel is part of the Zacks Aerospace - Defense Equipment industry. Over the past month, AAR (AIR - Free Report) , a stock from the same industry, has gained 7.1%. The company reported its results for the quarter ended May 2022 more than a month ago.
AAR reported revenues of $476.1 million in the last reported quarter, representing a year-over-year change of +8.8%. EPS of $0.72 for the same period compares with $0.47 a year ago.
For the current quarter, AAR is expected to post earnings of $0.58 per share, indicating a change of +11.5% from the year-ago quarter. The Zacks Consensus Estimate remained unchanged over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for AAR. Also, the stock has a VGM Score of A.