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Hexcel Corporation (HXL - Free Report) reported first-quarter 2022 adjusted earnings of 50 cents per share, which beat the Zacks Consensus Estimate of 39 cents by 28.2%. The bottom line improved massively from the year-ago earnings of 22 cents per share, highlighting solid growth of 127.3%.
In the quarter under review, the company posted GAAP earnings of 50 cents per share compared with the prior-year quarter’s earnings of 21 cents.
Total Sales
In the first quarter, net sales totaled $458 million, which beat the Zacks Consensus Estimate of $428 million by 6.8%. Also, the top line witnessed an improvement of 17.2% from the year-ago quarter’s $391 million.
Hexcel Corporation Price, Consensus and EPS Surprise
Hexcel's gross margin in the first quarter was 27.9% compared with 22.2% in the prior-year period. This was driven by strong production volume leverage, a favorable sales mix and absorption and a beneficial foreign exchange impact.
SG&A expenses increased 13.6%. Meanwhile, research and technology expenses for the first quarter of 2022 rose 27.5% year over year.
HXL’s adjusted operating income was $63 million in the quarter compared with $31.1 million in the year-ago period.
Segmental Performance
Commercial Aerospace: Net sales increased 30% year over year to $284.5 million. The rise was driven by growth in the Airbus A350 and A320neo programs.
Space and Defense: Net sales rose 6.8% year over year to $126.2 million. The increase can be attributed to growth across several platforms globally, including fixed-wing aircraft and both military and civilian rotorcraft.
Industrial: Net sales decreased 12.1% year over year to $47 million. The decline was primarily due to lower wind energy sales.
Financial Details
As of Mar 31, 2023, cash and cash equivalents were $105.7 million compared with $112 million as of Dec 31, 2022.
The long-term debt totaled $768.5 million as of Mar 31, 2023, up from $723.3 million as of 2022-end.
During the three months ended Mar 31, 2023, the company’s cash outflow from operating activities was $23.4 million compared with $19 million in the prior-year period.
Hexcel’s adjusted free cash outflow for the three months ended Mar 31, 2023 was $41.5 million compared with $39.9 million in the prior-year period.
2023 Guidance
The company provided its 2023 financial guidance. Hexcel expects to generate sales in the band of $1.725-$1.825 billion. The Zacks Consensus Estimate for sales, pegged at $1.75 billion, is lower than the midpoint of the company's guidance range.
HXL expects to generate adjusted earnings per share in the range of $1.70-$1.90 in 2023. The Zacks Consensus Estimate for sales, pegged at $1.80 per share, is in line with the midpoint of the company's guidance range.
Lockheed Martin Corporation (LMT - Free Report) reported first-quarter 2023 adjusted earnings of $6.43 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 5.9%. However, the bottom line was in line with the year-ago quarter's figure.
Net sales amounted to $15.13 billion in the reported quarter, which surpassed the Zacks Consensus Estimate of $14.87 billion by 1.9%. The top line rose 1.1% from $14.96 billion in the year-ago quarter.
Upcoming Defense Releases
Northrop Grumman Corporation (NOC - Free Report) is scheduled to report its first-quarter 2023 results on Apr 27. The Zacks Consensus Estimate for its first-quarter earnings is pegged at $5.20 per share, implying a decrease of 14.8% from the prior-year reported figure.
The Zacks Consensus Estimate for its first-quarter sales is pegged at $9.20 billion. This indicates an increase of 4.6% from the prior-year reported figure.
L3Harris Technologies, Inc. (LHX - Free Report) is slated to report its first-quarter 2023 results on Apr 27. The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.87 per share, suggesting a decrease of 8% from the prior-year reported figure.
The Zacks Consensus Estimate for first-quarter sales is pegged at $4.24 billion. This calls for growth of 3.4% from the prior-year reported figure.
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Hexcel (HXL) Q1 Earnings Beat Estimates, Sales Rise Y/Y
Hexcel Corporation (HXL - Free Report) reported first-quarter 2022 adjusted earnings of 50 cents per share, which beat the Zacks Consensus Estimate of 39 cents by 28.2%. The bottom line improved massively from the year-ago earnings of 22 cents per share, highlighting solid growth of 127.3%.
In the quarter under review, the company posted GAAP earnings of 50 cents per share compared with the prior-year quarter’s earnings of 21 cents.
Total Sales
In the first quarter, net sales totaled $458 million, which beat the Zacks Consensus Estimate of $428 million by 6.8%. Also, the top line witnessed an improvement of 17.2% from the year-ago quarter’s $391 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 first quarter was 27.9% compared with 22.2% in the prior-year period. This was driven by strong production volume leverage, a favorable sales mix and absorption and a beneficial foreign exchange impact.
SG&A expenses increased 13.6%. Meanwhile, research and technology expenses for the first quarter of 2022 rose 27.5% year over year.
HXL’s adjusted operating income was $63 million in the quarter compared with $31.1 million in the year-ago period.
Segmental Performance
Commercial Aerospace: Net sales increased 30% year over year to $284.5 million. The rise was driven by growth in the Airbus A350 and A320neo programs.
Space and Defense: Net sales rose 6.8% year over year to $126.2 million. The increase can be attributed to growth across several platforms globally, including fixed-wing aircraft and both military and civilian rotorcraft.
Industrial: Net sales decreased 12.1% year over year to $47 million. The decline was primarily due to lower wind energy sales.
Financial Details
As of Mar 31, 2023, cash and cash equivalents were $105.7 million compared with $112 million as of Dec 31, 2022.
The long-term debt totaled $768.5 million as of Mar 31, 2023, up from $723.3 million as of 2022-end.
During the three months ended Mar 31, 2023, the company’s cash outflow from operating activities was $23.4 million compared with $19 million in the prior-year period.
Hexcel’s adjusted free cash outflow for the three months ended Mar 31, 2023 was $41.5 million compared with $39.9 million in the prior-year period.
2023 Guidance
The company provided its 2023 financial guidance. Hexcel expects to generate sales in the band of $1.725-$1.825 billion. The Zacks Consensus Estimate for sales, pegged at $1.75 billion, is lower than the midpoint of the company's guidance range.
HXL expects to generate adjusted earnings per share in the range of $1.70-$1.90 in 2023. The Zacks Consensus Estimate for sales, pegged at $1.80 per share, is in line with the midpoint of the company's guidance range.
Zacks Rank
Hexcel currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Recent Defense Release
Lockheed Martin Corporation (LMT - Free Report) reported first-quarter 2023 adjusted earnings of $6.43 per share, which surpassed the Zacks Consensus Estimate of $6.07 by 5.9%. However, the bottom line was in line with the year-ago quarter's figure.
Net sales amounted to $15.13 billion in the reported quarter, which surpassed the Zacks Consensus Estimate of $14.87 billion by 1.9%. The top line rose 1.1% from $14.96 billion in the year-ago quarter.
Upcoming Defense Releases
Northrop Grumman Corporation (NOC - Free Report) is scheduled to report its first-quarter 2023 results on Apr 27. The Zacks Consensus Estimate for its first-quarter earnings is pegged at $5.20 per share, implying a decrease of 14.8% from the prior-year reported figure.
The Zacks Consensus Estimate for its first-quarter sales is pegged at $9.20 billion. This indicates an increase of 4.6% from the prior-year reported figure.
L3Harris Technologies, Inc. (LHX - Free Report) is slated to report its first-quarter 2023 results on Apr 27. The Zacks Consensus Estimate for first-quarter earnings is pegged at $2.87 per share, suggesting a decrease of 8% from the prior-year reported figure.
The Zacks Consensus Estimate for first-quarter sales is pegged at $4.24 billion. This calls for growth of 3.4% from the prior-year reported figure.