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Hexcel Corporation (HXL - Free Report) reported third-quarter 2022 adjusted earnings of 33 cents per share, which exceeded the Zacks Consensus Estimate of 32 cents by 3.1%.
The bottom line improved massively from the year-ago earnings of 8 cents per share, reflecting growth of a solid 153.8%.
In the quarter under review, the company posted GAAP earnings of 31 cents compared with the prior-year quarter’s earnings of 11 cents per share.
Total Sales
In the third quarter, net sales totaled $364.7 million, which lagged the Zacks Consensus Estimate of $391 million by 6.8%. However, the top line witnessed an improvement of 9.3% from the year-ago quarter’s $333.8 million.
Hexcel Corporation Price, Consensus and EPS Surprise
Hexcel's gross margin in the third quarter was 22.4% compared with 19.8% in the prior-year period, driven by higher sales.
SG&A expenses declined by 9.4%, whereas research and technology expenses for the third quarter of 2022 increased by 11.5% year over year.
HXL’s adjusted operating income amounted to $41.2 million in the quarter compared with the $23.6 million incurred in the year-ago period.
Segmental Performance
Commercial Aerospace: Net sales increased 25.1% year over year to $209.1 million, driven by growth in the A350 and A320 neo programs.
Space and Defense: Net sales decreased 1.6% year over year to $108.6 million. The decrease can be attributed to the impact of foreign exchange rates on European military and space sales.
Industrial: Net sales decreased 16.4% year over year to $47 million, primarily due to lower wind energy sales and the negative impact of foreign exchange.
Financial Details
As of Sep 30, 2022, cash and cash equivalents were $90.9 million compared with $127.7 million as of Dec 31, 2021.
The long-term debt totaled $797 million as of Sep 30, 2022, down from $822.4 million as of 2021-end.
In the third quarter of 2022, cash flow from operating activities was $56.4 million compared with $64.2 million in the prior-year period.
Hexcel’s adjusted free cash outflow for the nine months ended Sep 30, 2022 was $1.9 million compared to the free cash inflow of $49.2 million in the prior-year period.
2022 Guidance
The company changed its 2022 financial guidance.
Hexcel now expects to generate sales in the range of $1.53-$1.60 billion compared with the previous guidance in the band of $1.50-$1.63 billion in 2022. The Zacks Consensus Estimate for sales, pegged at $1.57 billion, is in line with the midpoint of the guidance range.
The company now projects to generate adjusted earnings per share in the range of $1.12-$1.24, up from the previously guided range of $1.00-$1.24 in 2022. The Zacks Consensus Estimate for sales, pegged at $1.19, is higher than the midpoint of the guidance range.
Lockheed Martin Corporation (LMT - Free Report) reported third-quarter 2022 adjusted earnings of $6.87 per share, which surpassed the Zacks Consensus Estimate of $6.58 by 4.4%. The bottom line also improved by 4.1% year over year.
Lockheed Martin’s net sales amounted to $16.58 billion, which rose 3.5% from the year-ago quarter. LMT ended the third quarter of 2022 (on Sep 25, 2022) with $139.71 billion in the backlog compared with $134.64 billion at the end of the second quarter of 2022.
Raytheon Technologies Corporation’s (RTX - Free Report) third-quarter 2022 adjusted earnings per share of $1.21 beat the Zacks Consensus Estimate of $1.11 by 9%. However, the bottom line dropped 4% from the year-ago quarter’s adjusted earnings of $1.26.
Raytheon Technologies’ third-quarter sales of $16,951 million missed the Zacks Consensus Estimate of $17,003 million by 0.3%. However, the sales figure rose 5% from the $16,213 million recorded in the year-ago quarter.
Upcoming Defense Release
Spirit AeroSystems (SPR - Free Report) is scheduled to release its third-quarter results on Nov 3. SPR delivered a four-quarter average negative earnings surprise of 100.31%.
The Zacks Consensus Estimate for Spirit AeroSystems’ third-quarter bottom line is pegged at a loss of 39 cents, which implies a solid improvement from a loss of $1.13 incurred in the third quarter of 2021.
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Hexcel (HXL) Q3 Earnings Beat Estimates, Sales Rise Y/Y
Hexcel Corporation (HXL - Free Report) reported third-quarter 2022 adjusted earnings of 33 cents per share, which exceeded the Zacks Consensus Estimate of 32 cents by 3.1%.
The bottom line improved massively from the year-ago earnings of 8 cents per share, reflecting growth of a solid 153.8%.
In the quarter under review, the company posted GAAP earnings of 31 cents compared with the prior-year quarter’s earnings of 11 cents per share.
Total Sales
In the third quarter, net sales totaled $364.7 million, which lagged the Zacks Consensus Estimate of $391 million by 6.8%. However, the top line witnessed an improvement of 9.3% from the year-ago quarter’s $333.8 million.
Hexcel Corporation Price, Consensus and EPS Surprise
Hexcel Corporation price-consensus-eps-surprise-chart | Hexcel Corporation Quote
Operational Update
Hexcel's gross margin in the third quarter was 22.4% compared with 19.8% in the prior-year period, driven by higher sales.
SG&A expenses declined by 9.4%, whereas research and technology expenses for the third quarter of 2022 increased by 11.5% year over year.
HXL’s adjusted operating income amounted to $41.2 million in the quarter compared with the $23.6 million incurred in the year-ago period.
Segmental Performance
Commercial Aerospace: Net sales increased 25.1% year over year to $209.1 million, driven by growth in the A350 and A320 neo programs.
Space and Defense: Net sales decreased 1.6% year over year to $108.6 million. The decrease can be attributed to the impact of foreign exchange rates on European military and space sales.
Industrial: Net sales decreased 16.4% year over year to $47 million, primarily due to lower wind energy sales and the negative impact of foreign exchange.
Financial Details
As of Sep 30, 2022, cash and cash equivalents were $90.9 million compared with $127.7 million as of Dec 31, 2021.
The long-term debt totaled $797 million as of Sep 30, 2022, down from $822.4 million as of 2021-end.
In the third quarter of 2022, cash flow from operating activities was $56.4 million compared with $64.2 million in the prior-year period.
Hexcel’s adjusted free cash outflow for the nine months ended Sep 30, 2022 was $1.9 million compared to the free cash inflow of $49.2 million in the prior-year period.
2022 Guidance
The company changed its 2022 financial guidance.
Hexcel now expects to generate sales in the range of $1.53-$1.60 billion compared with the previous guidance in the band of $1.50-$1.63 billion in 2022. The Zacks Consensus Estimate for sales, pegged at $1.57 billion, is in line with the midpoint of the guidance range.
The company now projects to generate adjusted earnings per share in the range of $1.12-$1.24, up from the previously guided range of $1.00-$1.24 in 2022. The Zacks Consensus Estimate for sales, pegged at $1.19, is higher than 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 Corporation (LMT - Free Report) reported third-quarter 2022 adjusted earnings of $6.87 per share, which surpassed the Zacks Consensus Estimate of $6.58 by 4.4%. The bottom line also improved by 4.1% year over year.
Lockheed Martin’s net sales amounted to $16.58 billion, which rose 3.5% from the year-ago quarter. LMT ended the third quarter of 2022 (on Sep 25, 2022) with $139.71 billion in the backlog compared with $134.64 billion at the end of the second quarter of 2022.
Raytheon Technologies Corporation’s (RTX - Free Report) third-quarter 2022 adjusted earnings per share of $1.21 beat the Zacks Consensus Estimate of $1.11 by 9%. However, the bottom line dropped 4% from the year-ago quarter’s adjusted earnings of $1.26.
Raytheon Technologies’ third-quarter sales of $16,951 million missed the Zacks Consensus Estimate of $17,003 million by 0.3%. However, the sales figure rose 5% from the $16,213 million recorded in the year-ago quarter.
Upcoming Defense Release
Spirit AeroSystems (SPR - Free Report) is scheduled to release its third-quarter results on Nov 3. SPR delivered a four-quarter average negative earnings surprise of 100.31%.
The Zacks Consensus Estimate for Spirit AeroSystems’ third-quarter bottom line is pegged at a loss of 39 cents, which implies a solid improvement from a loss of $1.13 incurred in the third quarter of 2021.