Stock Monitor: Hexcel Post Earnings Reporting
LONDON, UK / ACCESSWIRE / July 31, 2018 / If you want access to our free earnings report on Hexcel Corp. (NYSE: HXL), all you need to do is sign up now by clicking the following link www.active-investors.com/registration-sg/?symbol=HXL. Hexcel reported its second quarter fiscal 2018 operating and financial results on July 23, 2018. The maker of lightweight composite materials outperformed top- and bottom-line expectations. Additionally, the Company provided guidance for FY18. Register today and get access to over 1,000 Free Research Reports by joining our site below:
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Earnings Highlights and Summary
Hexcel’s sales of $547.5 million in the second quarter of 2018 were 11.4% higher than Q2 2017 sales of $491.3 million. The Company’s reported numbers beat analysts’ estimates of $535.0 million,
During Q2 2018, Hexcel’s gross margin was 26.4% compared to 28.5% in Q2 2017. The Company’s reported quarter gross margin for the reported quarter included an increase in depreciation of approximately $5 million. The Company experienced headwinds related to the startup and qualification of the new precursor (PAN) and carbon fiber plant in France.
For Q2 2018, Hexcel’s selling, general, and administrative (SG&A) expenses were $35.3 million, which was lower than $38.1 million in Q2 2017, with the Company maintaining tight cost controls while, at the same time, growing revenue.
Hexcel’s adjusted operating income was $96.5 million, or 17.6% of sales, in Q2 2018 compared to $89.7 million, or 18.3% of sales, in Q2 2017. The Company’s effective tax rate was 22.8% for the reported quarter compared to 26.7% in the prior year’s corresponding quarter.
For Q2 2018, Hexcel reported net income of $68.8 million, or $0.76 per diluted share, compared to $61.6 million, or $0.67 per diluted share, in Q2 2017. The Company’s adjusted earnings was $0.75 per share for the reported quarter compared to earnings of $0.67 per share in the prior year’s same quarter, reflecting an increase of 11.9% on a y-o-y basis, lower than Wall Street’s estimates of $0.76 per share.
Hexcel’s Segment Results
During Q2 2018, the Commercial Aerospace sales of $383.8 million increased 10.0% on y-o-y basis, primarily driven by higher production rates and higher composite content on the new narrowbody aircraft. The Company’s sales to "Other Commercial Aerospace," which include regional and business aircraft, were up over 40% on a y-o-y basis.
For Q2 2018, the Space & Defense sales of $91.7 million increased 4.4% on a y-o-y basis, driven by rotorcraft sales. Rotorcraft sales comprise just over half of Space & Defense sales, with key programs being the V-22 Osprey and UH-60 Black Hawk.
Total Industrial sales surged 32.1% to $72.0 million on a y-o-y basis. The Company noted that Wind energy sales (the largest submarket in Industrial) are experiencing a period of substantial growth relative to lower sales last year as new generation composite blades are adopted.
Hexcel’s free cash flow was $55 million for H1 FY18 compared to $13 million in FY17. The Company’s working capital increased $16 million for the reported quarter, which resulted in a cash use of $60 million in the first half of 2018 compared to a use of $7 million in H1 2017.
Hexcel used $151 million to repurchase shares of its common stock in the reported quarter and used $181 million for share repurchases in H1 2018. The remaining authorization under the share repurchase program at June 30, 2018, was $562 million.
For the full year 2018, Hexcel is forecasting sales in the range of $2.10 billion to $2.20 billion, and adjusted earnings in the band of $2.96 to $3.10 per diluted share.
For FY18, Hexcel is estimating to generate free cash flow greater than $230 million and accrual basis capital expenditures of $170 million to $190 million.
Stock Performance Snapshot
July 30, 2018 - At Monday’s closing bell, Hexcel’s stock marginally declined 0.41%, ending the trading session at $68.40.
Volume traded for the day: 358.12 thousand shares.
Stock performance in the last month – up 3.57%; previous three-month period – up 2.90%; past twelve-month period – up 31.84%; and year-to-date – up 10.59%
After yesterday’s close, Hexcel’s market cap was at $6.07 billion.
Price to Earnings (P/E) ratio was at 23.38.
The stock has a dividend yield of 0.73%.
The stock is part of the Industrial Goods sector, categorized under the Aerospace/Defense Products & Services industry.
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