Aircraft parts supplier Hexcel beats Q2 sales estimates

Overview

• Hexcel Q2 sales decline 2.1% to $490 mln, beating analyst expectations

• Adjusted EPS of $0.50 beats analyst forecasts, adjusted operating income misses estimates

• Co completes Belgium facility closure, incurs $24.2 mln in restructuring charges

Outlook

• Co maintains 2025 guidance and the guidance does not include tariff impact

• Hexcel maintains 2025 sales guidance at $1.88 bln to $1.95 bln

• Company projects 2025 adjusted EPS between $1.85 and $2.05

• Hexcel expects 2025 free cash flow of approximately $190 mln

• Company anticipates capital expenditures below $90 mln in 2025

Result Drivers

• COMMERCIAL AEROSPACE - Sales decreased 8.6% due to lower demand in major programs like Airbus A350 and Boeing 787

• DEFENSE, SPACE & OTHER - Sales increased 9.5%, driven by growth in military helicopters, fighter programs, and space initiatives

• GROSS MARGIN PRESSURE - Lower sales and inventory reduction actions led to reduced gross margin, with tariffs beginning to impact costs

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 4 "strong buy" or "buy", 13 "hold" and 2 "sell" or "strong sell"

• The average consensus recommendation for the aerospace & defense peer group is "buy."

• Wall Street's median 12-month price target for Hexcel Corp is $60.36, about 3.7% below its July 23 closing price of $62.60

• The stock recently traded at 28 times the next 12-month earnings vs. a P/E of 24 three months ago

Press Release: ID:nBw227lzya