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Hexcel's (HXL) Q1 Earnings Match Estimates, Sales Miss
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Hexcel Corporation (HXL - Free Report) reported first-quarter 2024 adjusted earnings of 44 cents per share, which came in line with the Zacks Consensus Estimate.
In the first quarter, Hexcel posted GAAP earnings of 43 cents per share compared to the prior-year quarter’s earnings of 50 cents.
Total Sales
In the first quarter, the company’s net sales totaled $472.3 million, which missed the Zacks Consensus Estimate of $475 million by 0.6%. However, the top line witnessed an improvement of 3.2% from the year-ago quarter’s reported sales of $457.7 million.
The year-over-year improvement can be attributed to sales growth from Commercial Aerospace as well as Space & Defense markets.
Hexcel Corporation Price, Consensus and EPS Surprise
Hexcel's gross margin in the first quarter was 25%, which declined from 27.9% in the prior-year period. The improvement in the gross margin was driven by favorable absorption and a favorable sales mix.
Selling, general and administrative (SG&A) expenses declined 3.5% year over year to $49 million in the first quarter. Meanwhile, research and technology expenses for the first quarter of 2024 rose 8.6% year over year to $15.1 million.
HXL’s adjusted operating income was $54.1 million in the quarter compared with $63 million in the year-ago period.
Market Performance
Commercial Aerospace: Net sales increased 5.2% year over year to $299.3 million, driven by increasing widebody sales.
Space and Defense: Net sales rose 10.2% year over year to $139.1 million. This market’s sales increase was led by fixed-wing aircraft programs, including the Lockheed F-35 and Airbus A400M, as well as classified programs.
Industrial: Net sales decreased 27.9% year over year to $33.9 million due to lower sales across all industrial sub-markets.
Financial Details
As of Mar 31, 2024, Hexcel’s cash and cash equivalents were $85.9 million compared with $227 million as of Dec 31, 2023.
The company’s long-term debt totaled $714.6 million as of Mar 31, 2024, up from $699.4 million as of 2023-end.
In the first quarter of 2024, HXL’s cash outflow operating activities was $7 million compared with cash outflow worth $23.4 million in the year-ago period.
Hexcel’s adjusted free cash outflow as of Mar 31, 2024 was $35.7 million compared with $41.5 million in the year-ago period.
Guidance
Hexcel reiterated its guidance for 2024. The company continues to expect to generate sales in the band of $1.925-$2.025 billion in 2024. The Zacks Consensus Estimate, pegged at $1.98 billion, is slightly higher than the midpoint of the company's guidance.
HXL still expects adjusted earnings per share in the range of $2.10-$2.30 in 2024. The Zacks Consensus Estimate, pegged at $2.22 per share, is higher than the company’s guided range.
Hexcel continues to expect to generate free cash flow of more than $200 million in 2024.
General Dynamics Corporation (GD - Free Report) is set to report first-quarter 2024 results on Apr 24 before market open. The Zacks Consensus Estimate for GD’s first-quarter earnings is pegged at $2.95 per share, which indicates an improvement of 11.7% from the prior year quarter’s reported figure.
The Zacks Consensus Estimate for GD’s first quarter sales is pegged at $10.34 billion, which implies an improvement of 4.7% from the prior year quarter’s reported figure.
Northrop Grumman (NOC - Free Report) is scheduled to report first-quarter 2024 results on Apr 25 before market open. The Zacks Consensus Estimate for NOC’s first-quarter earnings is pegged at $5.83 per share, which calls for an increase of 6% from the prior year quarter’s reported figure.
The Zacks Consensus Estimate for NOC’s first-quarter sales is pegged at $9.78 billion, which implies an improvement of 5.2% from the prior year quarter’s reported figure.
Textron Inc. (TXT - Free Report) is slated to report first-quarter 2024 results on Apr 25 before market open. The Zacks Consensus Estimate for TXT’s first-quarter earnings is pegged at $1.28 per share, which suggests growth of 21.9% from the prior year quarter’s reported figure.
The Zacks Consensus Estimate for TXT’s first-quarter sales is pegged at $3.37 billion, which indicates an improvement of 11.4% from the prior year quarter’s reported figure.
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Hexcel's (HXL) Q1 Earnings Match Estimates, Sales Miss
Hexcel Corporation (HXL - Free Report) reported first-quarter 2024 adjusted earnings of 44 cents per share, which came in line with the Zacks Consensus Estimate.
In the first quarter, Hexcel posted GAAP earnings of 43 cents per share compared to the prior-year quarter’s earnings of 50 cents.
Total Sales
In the first quarter, the company’s net sales totaled $472.3 million, which missed the Zacks Consensus Estimate of $475 million by 0.6%. However, the top line witnessed an improvement of 3.2% from the year-ago quarter’s reported sales of $457.7 million.
The year-over-year improvement can be attributed to sales growth from Commercial Aerospace as well as Space & Defense markets.
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 25%, which declined from 27.9% in the prior-year period. The improvement in the gross margin was driven by favorable absorption and a favorable sales mix.
Selling, general and administrative (SG&A) expenses declined 3.5% year over year to $49 million in the first quarter. Meanwhile, research and technology expenses for the first quarter of 2024 rose 8.6% year over year to $15.1 million.
HXL’s adjusted operating income was $54.1 million in the quarter compared with $63 million in the year-ago period.
Market Performance
Commercial Aerospace: Net sales increased 5.2% year over year to $299.3 million, driven by increasing widebody sales.
Space and Defense: Net sales rose 10.2% year over year to $139.1 million. This market’s sales increase was led by fixed-wing aircraft programs, including the Lockheed F-35 and Airbus A400M, as well as classified programs.
Industrial: Net sales decreased 27.9% year over year to $33.9 million due to lower sales across all industrial sub-markets.
Financial Details
As of Mar 31, 2024, Hexcel’s cash and cash equivalents were $85.9 million compared with $227 million as of Dec 31, 2023.
The company’s long-term debt totaled $714.6 million as of Mar 31, 2024, up from $699.4 million as of 2023-end.
In the first quarter of 2024, HXL’s cash outflow operating activities was $7 million compared with cash outflow worth $23.4 million in the year-ago period.
Hexcel’s adjusted free cash outflow as of Mar 31, 2024 was $35.7 million compared with $41.5 million in the year-ago period.
Guidance
Hexcel reiterated its guidance for 2024. The company continues to expect to generate sales in the band of $1.925-$2.025 billion in 2024. The Zacks Consensus Estimate, pegged at $1.98 billion, is slightly higher than the midpoint of the company's guidance.
HXL still expects adjusted earnings per share in the range of $2.10-$2.30 in 2024. The Zacks Consensus Estimate, pegged at $2.22 per share, is higher than the company’s guided range.
Hexcel continues to expect to generate free cash flow of more than $200 million in 2024.
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.
Upcoming Q1 Defense Releases
General Dynamics Corporation (GD - Free Report) is set to report first-quarter 2024 results on Apr 24 before market open. The Zacks Consensus Estimate for GD’s first-quarter earnings is pegged at $2.95 per share, which indicates an improvement of 11.7% from the prior year quarter’s reported figure.
The Zacks Consensus Estimate for GD’s first quarter sales is pegged at $10.34 billion, which implies an improvement of 4.7% from the prior year quarter’s reported figure.
Northrop Grumman (NOC - Free Report) is scheduled to report first-quarter 2024 results on Apr 25 before market open. The Zacks Consensus Estimate for NOC’s first-quarter earnings is pegged at $5.83 per share, which calls for an increase of 6% from the prior year quarter’s reported figure.
The Zacks Consensus Estimate for NOC’s first-quarter sales is pegged at $9.78 billion, which implies an improvement of 5.2% from the prior year quarter’s reported figure.
Textron Inc. (TXT - Free Report) is slated to report first-quarter 2024 results on Apr 25 before market open. The Zacks Consensus Estimate for TXT’s first-quarter earnings is pegged at $1.28 per share, which suggests growth of 21.9% from the prior year quarter’s reported figure.
The Zacks Consensus Estimate for TXT’s first-quarter sales is pegged at $3.37 billion, which indicates an improvement of 11.4% from the prior year quarter’s reported figure.