Hexcel Corporation (HXL - Free Report) reported second-quarter 2018 adjusted earnings of 75 cents per share, which missed the Zacks Consensus Estimate of 76 cents by 1.3%. However, the bottom line improved 11.9% from the prior-year figure of 67 cents.
In the reported quarter, the company’s GAAP earnings came in at 76 cents compared with the prior-year figure of 67 cents.
Net sales totaled $547.5 million, which surpassed the Zacks Consensus Estimate of $535 million by 2.3%. The top line also increased 11.4% from the year-ago figure of $491.3 million.
Hexcel's gross margin was 26.4% in the second quarter, reflecting a contraction of 210 basis points year over year.
The company’s operating expenses declined 3.8% year over year to $48.3 million in the reported quarter. The downside was caused by lower selling, general and administrative expenses, while high research and technology expenses rose marginally.
Quarterly Performance as per Markets
Commercial Aerospace: Net sales were up 10% year over year to $383.3 million. The uptick can be attributed to increased production rates and higher composite content on the new narrowbody aircraft.
Space and Defense: Net sales rose 4.4% year over year to $91.7 million, primarily owing to higher rotorcraft sales.
Industrial: Net sales improved 32.1% year over year to $72 million driven by high wind energy sales.
As of Jun 30, 2018, cash and cash equivalents were $39.1 million compared with $60.1 million as of Dec 31, 2017.
Long-term debt totaled $930.1 million as of Jun 30, 2018, up from $805.6 million as of Dec 31, 2017.
At the end of the second quarter, cash generated from operating activities summed $157.2 million compared with $182.4 million in the year-ago period.
Hexcel reiterated its 2018 guidance. The company continues to expect its 2018 sales in the range of $2.10-$2.20 billion. Also, it continues to project adjusted diluted earnings per share in the range of $2.96-$3.10.
Moreover, Hexcel still forecasts its free cash flow to exceed $230 million and accrual basis capital expenditures between $170 million and $190 million, in 2018.
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
Textron Inc. (TXT - Free Report) reported second-quarter 2018 earnings from continuing operations of 87 cents per share, which surpassed the Zacks Consensus Estimate of 70 cents by 24.3%.
AAR Corp. (AIR - Free Report) reported fourth-quarter fiscal 2018 adjusted earnings of 54 cents per share, which surpassed the Zacks Consensus Estimate of 52 cents by 3.9%.
Upcoming Defense Releases
Raytheon Company (RTN - Free Report) is expected to report second-quarter 2018 results on Jul 26. The company has an Earnings ESP of +1.10% and a Zacks Rank #2 (Buy).
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