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Hexcel (HXL) Q1 Loss Narrower Than Expected, Revenues Beat

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Zacks Equity Research
·3 min read
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Hexcel Corporation HXL reported first-quarter 2021 loss of 10 cents per share, which was narrower than the Zacks Consensus Estimate of a loss of 16 cents.

In the reported quarter, the company’s GAAP losses came in at 17 cents against the prior-year quarter’s GAAP earnings of 50 cents.

Total Sales

Net sales totaled $310.3 million, surpassing the Zacks Consensus Estimate of $298 million by 4.1%. However, the top line witnessed a decline of 42.6% from the year-ago quarter’s $541 million. Both the company’s Commercial Aerospace and Industrial segments registered year-over-year declines in sales.

Operational Update

Hexcel's gross margin for the first quarter was 17.1% compared to 26% in the prior-year period.

Adjusted operating income in the first quarter of 2021 was $1.9 million, or 0.6% of sales, compared to adjusted operating income of $80.4 million, or 14.9% of sales in 2020.

Quarterly Performance

Commercial Aerospace: Net sales plunged 59.3% year over year to $147.6 million. The decline in the segment’s sales reflected pandemic-induced build rate reductions by aircraft OEMs and continued supply-chain destocking.

Space and Defense: Net sales remained unchanged year over year at $111.7 million.

Industrial: Net sales declined 23.3% year over year to $51 million, primarily due to soft wind energy sales on account of lower demand and the cessation of sales in North America.

Hexcel Corporation Price, Consensus and EPS Surprise

Hexcel Corporation Price, Consensus and EPS Surprise
Hexcel Corporation Price, Consensus and EPS Surprise

Hexcel Corporation price-consensus-eps-surprise-chart | Hexcel Corporation Quote

Financial Details

As of Mar 31, 2021, cash and cash equivalents were $82 million compared with $103.3 million as of Dec 31, 2020.

Long-term debt totaled $912 million as of Mar 31, 2021, up from $925.5 million as of 2020-end.

At the end of first-quarter 2021, cash used in operating activities was $1.2 million compared to the $8.6 million cash generated in the prior-year period.

The effective tax rate for the first quarter of 2021 was a 36.8% benefit compared to a 21.9% charge in the first quarter of 2020.

Free cash outflow for the first quarter of 2021 was $6.1 million compared with $18.6 million in the first quarter of 2020.

2021 Guidance

Hexcel continues to withhold its financial guidance due to the market uncertainties arising from the global pandemic.

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.

A Recent Defense Release

Lockheed Martin Corp. LMT reported first-quarter 2021 earnings of $6.56 per share, which surpassed the Zacks Consensus Estimate of $6.32 by 3.8%.

Upcoming Defense Releases

General Dynamics GD carries a Zacks Rank #3 and is scheduled to report first-quarter 2021 results on Apr 28.

Boeing BA carries a Zacks Rank #3 and is scheduled to report first-quarter 2021 results on Apr 28.

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The Boeing Company (BA) : Free Stock Analysis Report

General Dynamics Corporation (GD) : Free Stock Analysis Report

Lockheed Martin Corporation (LMT) : Free Stock Analysis Report

Hexcel Corporation (HXL) : Free Stock Analysis Report

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