We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Why Is Hexcel (HXL) Down 10.5% Since Last Earnings Report?
Read MoreHide Full Article
It has been about a month since the last earnings report for Hexcel (HXL - Free Report) . Shares have lost about 10.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hexcel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hexcel's Q4 Earnings Surpass Estimates, Revenues Miss
Hexcel Corporation reported fourth-quarter 2019 adjusted earnings of 86 cents per share, surpassing the Zacks Consensus Estimate of 85 cents by 1.2%. Further, the bottom line improved 4.9% from the prior-year quarter’s 82 cents.
In the reported quarter, the company’s GAAP earnings came in at 86 cents compared with the prior-year quarter’s 76 cents.
For 2019, Hexcel's earnings were $3.54 per share, up 16.1% from $3.05 in the year-ago period. The full-year earnings figure surpassed the Zacks Consensus Estimate of $3.53 by 0.3%.
Total Revenues
Net sales totaled $564.3 million, which missed the Zacks Consensus Estimate of $591.1 million by 4.5%. However, the top line witnessed an increase of 0.6% from the year-ago quarter’s $561 million.
In 2019, total revenues grew 7.6% year over year to $2,355.7 million. However, the full-year revenues figure missed the Zacks Consensus Estimate of $2,380 million by 1%.
Operational Update
Hexcel's gross margin was 26% in the fourth quarter, reflecting a year-over-year contraction of 80 basis points.
The company’s operating expenses amounted to $49.1 million in the quarter compared with the previous year’s $54.6 million. Selling, general and administrative expenses were up 13.3%, while research and technology expenses were down 13.2%.
Quarterly Performance
Commercial Aerospace: Net sales were down 1.5% year over year to $379.8 million. The decline can be attributed to lower sales for legacy narrow-body programs.
Space and Defense: Net sales rose 18% year over year to $115.3 million, primarily owing to growth across several defense and space programs, and the F-35 Joint Strike Fighter (JSF) program alongside the contribution from ARC Technologies.
Industrial: Net sales declined 11.2% year over year to $69.2 million, primarily due to soft wind energy sales.
Financial Details
As of Dec 31, 2019, cash and cash equivalents were $64.4 million compared with $32.7 million as of Dec 31, 2018.
Long-term debt totaled $1,050.6 million as of Dec 31, up from $947.4 million as of 2018-end.
At the end of 2019, cash generated from operating activities summed $491.1 million compared with $421.4 million in the prior year.
Other Financial Updates
The effective tax rate for the fourth quarter of 2019 was 16.6% compared with 24.2% in the year-ago period. The fourth quarter of 2019 was favorably impacted by a rate adjustment
The company used $76 million to repurchase shares of its common stock during the fourth quarter of 2019, bringing the total share repurchase value to $143 million in 2019. The remaining authorization under the share repurchase program as of Dec 31 was $242 million.
2020 Guidance
Hexcel forecasts its free cash flow to exceed $300 million and accrual basis capital expenditures to remain between $100 million and $120 million in 2020. The underlying effective tax rate is estimated at 23%.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Why Is Hexcel (HXL) Down 10.5% Since Last Earnings Report?
It has been about a month since the last earnings report for Hexcel (HXL - Free Report) . Shares have lost about 10.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Hexcel due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hexcel's Q4 Earnings Surpass Estimates, Revenues Miss
Hexcel Corporation reported fourth-quarter 2019 adjusted earnings of 86 cents per share, surpassing the Zacks Consensus Estimate of 85 cents by 1.2%. Further, the bottom line improved 4.9% from the prior-year quarter’s 82 cents.
In the reported quarter, the company’s GAAP earnings came in at 86 cents compared with the prior-year quarter’s 76 cents.
For 2019, Hexcel's earnings were $3.54 per share, up 16.1% from $3.05 in the year-ago period. The full-year earnings figure surpassed the Zacks Consensus Estimate of $3.53 by 0.3%.
Total Revenues
Net sales totaled $564.3 million, which missed the Zacks Consensus Estimate of $591.1 million by 4.5%. However, the top line witnessed an increase of 0.6% from the year-ago quarter’s $561 million.
In 2019, total revenues grew 7.6% year over year to $2,355.7 million. However, the full-year revenues figure missed the Zacks Consensus Estimate of $2,380 million by 1%.
Operational Update
Hexcel's gross margin was 26% in the fourth quarter, reflecting a year-over-year contraction of 80 basis points.
The company’s operating expenses amounted to $49.1 million in the quarter compared with the previous year’s $54.6 million. Selling, general and administrative expenses were up 13.3%, while research and technology expenses were down 13.2%.
Quarterly Performance
Commercial Aerospace: Net sales were down 1.5% year over year to $379.8 million. The decline can be attributed to lower sales for legacy narrow-body programs.
Space and Defense: Net sales rose 18% year over year to $115.3 million, primarily owing to growth across several defense and space programs, and the F-35 Joint Strike Fighter (JSF) program alongside the contribution from ARC Technologies.
Industrial: Net sales declined 11.2% year over year to $69.2 million, primarily due to soft wind energy sales.
Financial Details
As of Dec 31, 2019, cash and cash equivalents were $64.4 million compared with $32.7 million as of Dec 31, 2018.
Long-term debt totaled $1,050.6 million as of Dec 31, up from $947.4 million as of 2018-end.
At the end of 2019, cash generated from operating activities summed $491.1 million compared with $421.4 million in the prior year.
Other Financial Updates
The effective tax rate for the fourth quarter of 2019 was 16.6% compared with 24.2% in the year-ago period. The fourth quarter of 2019 was favorably impacted by a rate adjustment
The company used $76 million to repurchase shares of its common stock during the fourth quarter of 2019, bringing the total share repurchase value to $143 million in 2019. The remaining authorization under the share repurchase program as of Dec 31 was $242 million.
2020 Guidance
Hexcel forecasts its free cash flow to exceed $300 million and accrual basis capital expenditures to remain between $100 million and $120 million in 2020. The underlying effective tax rate is estimated at 23%.
How Have Estimates Been Moving Since Then?
Analysts were quiet during the last two month period as none of them issued any earnings estimate revisions.