赫氏 (HXL) 2026年第三季度业绩电话会：航空航天业务增长与利润率展望

核心要点

• 在商用航空业务增长21%的推动下，2026年第三季度销售额同比增长8.8%，达到4.96亿美元。
• 调整后营业利润率从9.8%升至11.0%，调整后稀释每股收益增长35%至0.50美元。
• 赫氏重申其2026财年营收指引为20.25亿至21.5亿美元，自由现金流指引超过1.95亿美元。
• 管理层预计，根据采购订单、空客排期和供应商需求信号，2026年A350机套交付量至少为80套，2027年约为100套。
• 公司认为，在本十年结束前，调整后营业利润率有望提升至约18%。管理层表示，利润率提升举措可能会带来向20%靠拢的上行空间。
• 赫氏将股票回购授权额度提高至7.5亿美元，并预计在杠杆率（净债务与调整后EBITDA比率）恢复到1.5倍至2.0倍的目标区间后，考虑重启股票回购。

关键财务数据

复合材料部门的调整后营业利润率为14.6%，高于此前的11.2%。工程产品部门的利润率为11.8%，低于此前的15.5%。

业务与运营表现

商用航空业务仍是主要的增长驱动力。随着空客和波音提高产量，A350、A320neo、787和737 MAX的销售额均实现增长。管理层指出，赫氏交货比最终飞机交付至少提前六个月，因此客户采购订单和生产排期比已公布的OEM交付量对其前景更具参考价值。

A350需求是关注的重点。赫氏估计，截至第三季度，客户提取的材料相当于约60至65套机套。第四季度的确定订单支撑了公司对2026年至少80套机套的预期。管理层表示，空客的排期、供应商调查以及2027年的初始订单支持明年约100套机套的前景。

由于退出非核心工业业务、美国空间发射器和火箭发动机业务阶段性疲软，以及F-35和阵风项目的阶段性需求放缓，国防、航天及其他业务销售额有所下降。管理层预计国防与航天业务的表现将有所改善，但部分与发射相关的复苏可能要到2027年才会显现。

赫氏正重新启动闲置生产线，并在预期产出增加前加快招聘。截至9月，公司已招聘约525名员工，超过了原定全年400人的计划，并预计在年底前再增加约200人。培训和开工成本对近期利润率构成压力，但管理层预计随着时间推移，产能利用率的提升将改善固定成本分摊。

管理层业绩指引

赫氏重申其2026财年营收指引为20.25亿至21.5亿美元，自由现金流指引超过1.95亿美元。管理层表示，营收最终至少能达到指引中点附近，并有可能略高于中点。公司还预计全年营业利润率约为13%。

展望2027年，管理层预计营收将增长且固定成本分摊将改善，但尚未发布详细的年度指引。在下半年生产率和出货量红利加强之前，招聘和培训效率低下在上半年仍可能是阻力因素。

随着空客和波音达到其公布的生产目标，赫氏估计，与2025财年相比，现有合同每年可在商用航空业务中创造约5亿美元的增量销售额。管理层还确定了在国防与航天、支线飞机和公务机领域约2亿美元的额外机遇。

公司计划通过产量增长、定价、生产率提升和成本控制，在2030年之前实现约18%的调整后营业利润率。管理层表示，更强的价格落实能力和长期协议重新谈判可能推动利润率接近20%。

由于赫氏推进碳纤维和原丝产能建设，近期资本支出预计保持在1亿至1.25亿美元左右。管理层表示，除非A350月产量提升至12架以上，或下一代单通道飞机项目需要新增产能，否则在2030年代初期之前不需要再进行重大投资。

风险与关注事项

• 加速招聘、员工培训和生产线重启成本预计将对利润率造成压力，这一影响将持续至2027年初。
• 由于美元走软，外汇因素使2026年第三季度的营业利润率减少了约30个基点。
• 油价上涨可能会逐渐推高能源和原材料成本，不过套期保值和采购合同缓解了近期影响。丙烯腈仅占销售额的低个位数百分比。
• 空间发射器和火箭发动机出货量暂时维持疲软，复苏取决于客户排期和特定行业问题。
• A350需求能见度有所改善，但投资者对潜在的渠道库存和去库存提出了疑问。管理层表示，当前的订单和供应商信号并未显示2027年会出现去库存现象。
• 中国航空级碳纤维可能在未来平台上成为竞争对手，不过管理层并不认为它会对当前的空客或波音项目构成现实威胁。

分析师问答亮点

A350能见度：管理层表示，2027年约100套机套的估计得到了空客多年生产排期、对约15个客户基地的调研以及1月和2月初始采购订单的支撑。赫氏预计明年A350不会出现去库存。

利润率扩张：首席财务官詹姆斯·库根（James Coogan）指出，定价、长期协议重新谈判、生产良率、持续改进和管理费用（G&A）效率是提升利润率的主要杠杆。管理层相信，这些举措可以填补约200个基点的成本通胀差距，并创造超出18%目标的上行空间。

国防项目：赫氏在每套CH-53K直升机上的价值量为250万至350万美元，在每套黑鹰（Black Hawk）直升机上的价值量为20万至50万美元。管理层还看好V-75及波音第六代战斗机项目未来的机遇，不过预计这些项目不会对近期展望产生实质性影响。

资本配置：截至2026年9月30日，净杠杆率降至2.1倍。赫氏预计将在2026年第四季度恢复到1.5倍至2.0倍的目标区间，之后将评估在扩大的7.5亿美元授权下进行股票回购。董事会还派发了每股0.18美元的季度股息。

业绩电话会议完整转录文稿

---

完整财报电话会议逐字稿

管理层陈述

Operator

Hello, everyone. Thank you for joining us, and welcome to the Hexcel Third Quarter 2026 Earnings Call. [Operator Instructions]

I will now hand the conference over to Kurt Goddard, Vice President, Investor Relations. Kurt, please go ahead.

Kurt Goddard

Hello, everyone. Welcome to Hexcel Corporation's Third Quarter Earnings Conference Call. Before beginning, let me cover the formalities. I would like to remind everyone about the safe harbor provisions related to any forward-looking statements we may make during this call. Certain statements contained in this call may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. They involve estimates, assumptions, judgments and uncertainties caused by a variety of factors that could cause future actual results or outcomes to differ materially from our forward-looking statements today.

Such factors are detailed in the company's SEC filings and earnings release. We will be referencing a supporting presentation today that is available on the webcast. In the earnings release and in today's webcast and the supporting presentation, we reference non-GAAP financial measures. Reconciliations to the most directly comparable GAAP measures are provided in the earnings release and in the appendix to the presentation. A replay of this call will be available on the Investor Relations page of our website. Lastly, this call is being recorded by Hexcel Corporation and is copyrighted material. It cannot be recorded or rebroadcast without our express permission. Your participation on this call constitutes your consent to that request.

With me today are Tom Gentile, our Chairman, CEO and President; and Jamie Coogan, our Chief Financial Officer. The purpose of the call is to review our third quarter 2026 results detailed in our news release issued yesterday.

Now let me turn the call over to Tom. Tom?

Thomas Gentile

Thanks, Kurt. Hello, everyone, and thank you for joining us today for Hexcel's Third Quarter 2026 Earnings Call. Beginning with Slide 4 of the slide deck. Increasing customer demand across commercial aerospace, defense and space continues to provide a strong long-term outlook for the advanced lightweight material Hexcel provides. As commercial aircraft production rates recover, and we work to capture defense and space growth. Our focus is on executing the ramp to deliver for customers and capture the significant growth opportunities ahead. As discussed on our previous earnings call, third quarter results reflected the typical seasonality we experienced during the summer months. with extended European holidays. With a strong demand outlook in Q4 and 2027, we continue to return idle manufacturing lines of production and to recruit new employees to meet the higher production rates.

While restarting production lines and hiring new workers to support the production rate ramp pressures margins in the short term, it positions Hexcel to benefit from greater operating leverage in future periods. Hexcel has a compelling value proposition with a broad and differentiated portfolio of advanced lightweight composite material solutions. Decades of technical expertise, virally integrated capabilities at scale and long-standing relationships with leading aerospace and defense manufacturers. We are also building relationships with new market entrants, including defense tech space and commercial aerospace companies. These strengths position us well as customers increase production and introduce new platforms that drive demand for Hexcel's lightweight, high-performance materials.

In the third quarter, referring to Slide 5 Hexcel generated sales of $496 million, up 9% from the same period last year. Adjusted operating margins were 11%, up from 9.8% compared to the third quarter of 2025 and adjusted diluted earnings per share of $0.50 compared with $0.37 in the third quarter of last year. Turning to Slide 6. Commercial aerospace sales were $330 million for the quarter, up 21% year-over-year. Volumes increased across all our major commercial platforms including the Airbus A350, the A320neo, the Boeing 787 and the 737 MAX. As we have pointed out previously, Xcel is an upstream material supplier and generally ships several ones ahead of final aircraft assembly. We manage the business based on production demand and purpose stores we received, not reported OEM aircraft deliveries. The demand signals we see and continue to support the production ramp and our current hiring plans.

Consequently, we are reaffirming our financial guidance for 2026, with revenues between $2.025 billion and $2.15 billion, diluted EPS [Audio Gap] $2.40 and free cash flow greater than $195 million. Specifically on the A350 purchase orders received through year end 2026 support our guidance of at least 80 shipsets. Looking into 2027, current demand signals indicate around 100 A350 ship sets. As we prepare for that step up in production, we will do so with a focus on maintaining the safety, quality and delivery performance our customers expect. Turning to Defensive space and other on Slide 7. Sales for this market were $166 million for the quarter. The year-over-year decline primarily reflects the previously disclosed divestiture of our noncore industrial business in Austria and closure of noncore industrial operations at our Lester U.K.. These actions streamlined our footprint and increased our focus on niche industrial markets that value Hexcel's high-performance aerospace-grade composite materials.

Sales in Defense and Space were also impacted by temporary softness in space launchers and rocket loaders in the U.S. market, a slow quarter for the F-35 program from timing and customer schedule shifts and a slower quarter for the Rafale from summer sales seasonality. The Defense and Space market is a strategic priority for organic growth with its compelling long-term potential. Permit budgeting, procurement and program funding could take time to translate into production and ultimately, sales, particularly for companies further back in the supply chain such as itself. We have strong positions across rotorcraft, fixed line and other programs with traditional defense primes, many of which are expected to be in service for decades. Also, we are expanding our work with new aerospace and defense entrants. Hexcel's advanced lightweight materials provide the high performance required for defense and space in platforms, and we are confident in long-term demand in this market.

Taken together, these demand trends across our portfolio to support our promise. As Airbus and Boeing reached their publicly announced peak production rates, we expect approximately $500 million in incremental commercial aerospace sales annually from our existing contracts compared to fiscal year 2025 sales. We also see approximately $200 million of additional growth opportunities across the tentative space, regional and business debt. As these higher volumes move through our existing capacity, we will realize better fixed cost absorption that will generate greater operating leverage. Combined with pricing increases, as contracts renew, productivity improvements and disciplined cost control, the production ramp provides a path to approximately 18% adjusted operating margins before the end of the decade. We also see potential upside beyond that 18% as we focus more aggressively on pricing that reflects the value we deliver and the barriers to entry that exist to produce lightweight aerospace-grade carbon fiber composite.

I've asked Jamie to take the lead on driving a multiyear margin expansion initiative, which we will describe in more detail on future calls. Looking at capital allocation. Our cash generation profile allows us to invest in the business while maintaining a strong balance sheet. Following the increase in debt from our accelerated share repurchase last October, we are on track to leverage to return our leverage to our targeted range of 1.5 to 2x net debt to adjusted EBITDA by the end of 2026, reflecting confidence in Hexcel's growth and cash generation potential our board has increased the share repurchase authorization to $750 million from the $381 million remaining as of September 30 of this year. We will evaluate share repurchases once we return to our targeted leverage range sometime during Q4 of 2026. Also, as we announced last night, the Board has declared a quarterly dividend of $0.18 per share.

On Slide 8, turning to innovation, our team recently attended CAMX, the largest composites and advanced materials show in North America. We engage with customers, suppliers and industry partners at the event, demonstrating how Hexcel's advanced materials and vertically integrated operations to support growing demand from commercial aerospace, defense and space platforms. At CAMX, we announced 3 balances across our Honeycomb and prepaid portfolio. The announcements highlighted how Hexcel innovation enables customers to build next-generation platforms that are lighter and stronger and can be manufactured faster at higher rates. This focus on material and manufacturing innovation supports broader adoption of Hexcel Advanced Composites and positions us to secure positions on future aerospace and space platforms.

The lower image you see on Slide 8 is an aerospace honey comp that we recently qualified with an aerospace database called NCAMP which is part of NIAR Wichita State University, which enables engineers at our customers and prospective customers to evaluate design ready products. This is 1 example of how we are supporting new A&D entrants as we streamline the process for evaluating and adopting our composite solutions. To summarize before I turn the call over to Jamie, third quarter reflected normal summer seasonality, the restart of idle production lines and our accelerated hiring to meet rising customer demand. At the same time, commercial aerospace sales volumes continued to increase with a 21% increase. The production rate recovery is taking hold, and we are continuing to focus on execution to meet the rate ramps. Our differentiated portfolio, technical expertise, strong global reputation and deep customer relationships, combined with our global manufacturing footprint, positions us well to capture growth, improve operating leverage and generate cash going forward.

This supports our confidence in Hexcel's long-term outlook and reinforces our 2026 financial guidance.

With that, I'll turn the call over to Jamie to discuss the third quarter financial results in more detail. Jamie?

James Coogan

Thank you, Tom. I've now been with Hexcel about 6 months. And as you heard Tom comment, the key priority and focus for me is margin expansion. I'm working very closely with our global team to improve price realization, while tightly managing our costs and continuous improvement efforts to expand our operating margins. While it's too soon to provide specific details and actions to these initiatives, we continue to see the benefits of price in our margins during 2026. Now turning to our financial results for the period, starting with Slide 9. Third quarter 2026 sales of $496 million grew 8.8%. Strong commercial aerospace growth was partially offset by lower defense, space and other sales. By market, commercial aerospace sales for the third quarter of 2026 were $330 million, an increase of 21% compared to the third quarter of 2025. And Commercial Aerospace comprised approximately 67% of the total quarterly sales. All 4 of our primary platforms grew year-over-year, including A350, 787, A320neo and 737 MAX as Airbus and Boeing continue to ramp their aircraft production.

Sales for other commercial aerospace in the third quarter increased 1% year-over-year. Defense, Space and other third quarter sales of $166 million represented approximately 33% of total sales. Third quarter sales decreased 9% on lower space volume, the 2 fighter programs that Tom described and the absence of sales from the industrial businesses we exited in 2025 and 2026. Lower space volume was largely attributable to lower bonders and rocket motors, which are going through a temporary softspot due to some unique industry dynamics here in the U.S. As a reminder, we have exited noncore industrial markets through the divestment of the Austrian Industrial business on September 30, 2025, and the winding down of the industrial business at our Lester U.K. site earlier this year. Our industrial business is now solely focused on niche industrial opportunities that demand high performance of aerospace grade composite solutions.

Gross margin of 23.3% in the third quarter of 2026 increased from 21.9% in the third quarter of 2025 on improved operating leverage and price realization. The use of hedges and procurement contracts continues to meet the near-term impact of higher oil prices. If oil remains elevated, impact to energy and costs will be layered into our business over time. I would also like to remind listeners that Hexcel is vertically integrated with value-added all along the production process and that we have a broad product line in addition to carving fiber. AN is not a significant driver of our cost base at only low single digits as a percentage of sales. And of course, the flip side of elevated oil prices is that higher energy costs further drive the value proposition for lightweight Hexcel composites to support aircraft fuel efficiency. As a percentage of sales, selling, general and administrative expenses were 9% in the third quarter of 2026, unchanged from the comparable prior year period.

R&D expenses were 3.3% in the third quarter of 2026 compared to 3.1% in the third quarter of 2025 as we continue to drive innovation to position Hexcel to win work packages on next-generation platforms including the next gen full aisle aircraft under development. Foreign exchange remains a headwind year-over-year due to the weaker dollar. Third quarter 2026 operating margin was negatively impacted by approximately 30 basis points due to foreign exchange. Adjusted operating income in the third quarter was $54 million or 11% of sales compared to $45 million or 9.8% of sales in the comparable prior year period. Adjusted EBITDA totaled $304 million or 19.9% of sales for the 9 months ended September 30, 2026. This compares to $249 million or 17.8% of sales for the 9 months ended September 30, 2025. And as a reference, trailing 12-month adjusted EBITDA through September 30, 2026, was $401 million. Adjusted EPS of $0.50 increased 35% from the comparable prior year period on volume and price and was also supported by a lower tax rate.

Third quarter tax rate largely benefited from the implementation of tax planning strategies in the quarter, resulting in a true-up to our quarter for the full year -- sorry, a true-up to our rate for the full year. And of course, a lower tax rate leads to lower cash taxes. Now turning to our Segments. Per Slide 10, the Composite Materials segment representing 79% of the total [ quarter ] sales and generated an adjusted operating margin of 14.6%. This compares to an adjusted operating margin of 11.2% in the prior year period. The Engineered Products segment, which is comprised of our structures and engineered core businesses, represented 21% of total sales and generated an adjusted operating margin of 11.8%. This compares to an adjusted operating margin of 15.5% in the prior year period. Net cash provided by operating activities in the first 9 months of 2026 was $171 million compared to $105 million in the first 9 months from 2025. Working capital was a cash use of $78 million in the first 9 months compared to a cash use of $64 million in the first 9 months of 2025.

Capital expenditures on an accrual basis for the first 9 months of 2026 were $61 million compared to $50 million in the comparable prior year period.

Now turning to Slide 11. Free cash flow in the 9 months ended September 30, 2026, was $103 million compared to $50 million in the 9 months ended September 30, 2025. Leverage, defined as net debt to the last 12 months adjusted EBITDA was about 2.1x at September 30, 2026, which compares favorably to the year-end 2025 leverage of just under 2.7x. We are on track to return to our target leverage ratio of 1.5 to 2x during the fourth quarter of 2026. The company did not repurchase any shares of common stock in the third quarter with the remaining authorization under our program as of September 30, 2026, totaling $381 million. As Tom noted earlier, yesterday, the Board of Directors increased our share repurchase authorization to $750 million, and we will look to recommence our share repurchase activity once we've reached our target leverage levels.

In addition, yesterday, the Board of Directors declared an $0.18 quarterly dividend. The dividend is payable to stockholders of record as of November 2 with a payment date of November 9. Finally, on Slide 12, as Tom highlighted, our 2026 financial guidance is reaffirmed and unchanged.

With that, let me turn the call back to Tom.

Thomas Gentile

Thanks, Jamie. Let me close with a few key takeaways from the quarter on Page 13. Customer demand continues to increase, and we are restarting idle lines early and investing now in hiring people to prepare Hexcel for higher production levels in 2027 and beyond. These hiring and trading costs do impact near-term margins, but they position us to execute the production ramp and deliver for our customers. As higher volumes move through our existing capacity, we will benefit from improved cost absorption and operating leverage. Importantly, we are maintaining our fiscal guidance in 2026. We see the production rate ramp up continuing into 2027 with very strong demand. Our initial outlook on the A350 our largest program is that we will deliver around 100 chip sets in 2027, approximately a 25% increase over 2026.

We also remain on track to achieve our target leverage of less than 2x net debt to EBITDA, and our Board of Directors has approved an increase in our share repurchase authorization to $750 million. As the OEMs reach their target levels of production for each program, we have a clear path to return our margins to the pre-pandemic level of 18% with upside based on the price realization that we are now seeing in the market. With our differentiated portfolio, technical capabilities and strong customer positions, we are confident in Hexcel's ability to convert this growth into stronger margins, cash generation and long-term value for our stockholders.

With that, Hillary, we are now ready to take questions.

Operator

[Operator Instructions] Your first question comes from Michael Ciarmoli from Guggenheim Securities.

分析师问答

Michael Ciarmoli

Tom or Jamie, just on the A350, the 25% increase next year. You guys have obviously been producing ahead of what Airbus has been delivering. It sounds like you're pretty confident in the line of sight there. Is there any risk of sort of a destock situation or that you would be slowed down at all. And then I guess, just tying in with the ramp on the A350, I mean that's your biggest program, kind of points to incremental revenue of almost $100 million. It's the most margin-rich content. So should we expect any disproportionately higher margin expansion next year or maybe better incrementals as that program ramps?

Unknown Executive

Right. So obviously, the A350 this year so far through September had delivered 38 units. We've been calling 80 units all year in terms of our guidance. And we feel confident in that because we have firm purchase orders now that go right through the end of the year. And as we stated, we are a material supplier, so we're well upstream at least 6 months ahead of Airbus. So the material we're delivering today is not for deliveries today, obviously, it's for deliveries next June and July. So that's one thing is that we still see a very high probability that 80% is the right number for this year. And the reason we're saying 100 for next year is really we're triangulating a number of different signals.

First of all, Airbus has publicly stated they're still on track to have 12 aircraft per month by 2028 and that next year is going to be right in line with that. The other thing is we have their Skyline. They give us the long-term schedule that goes out 2 or 3 years, and that's consistent with the 100 deliveries next year. In addition, we do supplier surveys of all the 15 or so sites around the world that take A350 material. And we ask them what are they seeing in terms of their outlook and their near-term demand and they are also confirming that 100 next year is a good number. And then also some of the initial purchase orders that we already have in place for next January and February reinforced that number.

So we feel confident that 100 is a good number and that we will not see destocking next year. And of course, 2028 is even going to be higher. We won't get into those numbers just yet. But we see a steady increase as Airbus proceeds toward 12 aircraft per month in 2028, which is their target. Now in terms of margin expansion on the A350 as it expands, it obviously helps us in terms of our fixed cost absorption and getting more operating leverage. And so that will have a positive impact on margins, yes.

Operator

Your next question comes from the line of Gavin Parsons from UBS.

Gavin Parsons

Is it possible to quantify the magnitude of the accelerated investment growth this year? And then specifically, looking at corporate, I think that lines up to $17 million year-to-date. So just what you're assuming for corporate expense this year and what's a good run rate level?

Thomas Gentile

Right. Well, one way to quantify the investment we're making, I think, a good surge, it would be head count. We have to hire new heads to support the line. So between last year and this year, we've moved forward 3 of our carbon fiber lines and started them up early. And obviously, we have to hire to support that. But we also have to support all of our other products, our engineered core, our structures and so forth. And so at the beginning of this year, we said that we were going to hire 400 people over the course of the year. Well, as of the end of September, we hired about 525. So we're already well ahead of the pace. And by the end of the year, we'll probably hire another couple of hundred more to support all the production that we see next year.

So that gives you some indication of the level of investment that we're making. And in terms of corporate expense, the SG&A, as Jamie said, was about 9% of sales, which was consistent with where it is last year. As our production goes up and our revenues increase, we don't expect that corporate costs are going to go up at the same level. And so we're targeting to get back to our 6.5% to 7% SG&A as a percent of corporate -- of total sales as we get up to the full rates of production.

Operator

Your next question comes from the line of Scott Mikus from Melius Research.

Scott Mikus

Tom, has signaled that it wants to get on to the A350 program, eventually. Just curious how you're thinking about that when it comes to pricing, is that LTA comes to in 2030, but also the capital investments you would need to make on that program because it seems like Airbus is going to take the production rate above 12 per month maybe into the mid-teens at some point, does it make sense to invest more in CapEx if Airbus is potentially going to shift some share to [indiscernible].

Thomas Gentile

Well, Scott, what I would say is material systems are very complex. They require a lot of validation of the material system itself and certification into the airplane. Those things take years, then you would have to industrialize it. I think it's very difficult to change the material system, certainly for any primary or secondary structure. So that's one thing to take into account. In terms of capital investments, we are capitalized sufficiently with the production lines that we have in place to achieve the 12 aircraft per month that Airbus has indicated by '28. If they go above that, that would require probably another carbon fiber line. in the early 2030s. And so we would be in discussions with Airbus well in advance.

It's probably about a 3-year lead time or something like that. And we would be in discussions with them well in advance of that. So that's the way I would say it is we don't need any production to achieve the target production levels that they have right now, which is 12 aircraft per month by 2028. If they go above that, in the early 2030s, we would talk with them about that at that time.

Operator

Your next question comes from the line of Richard Safran from Seaport Research Partners.

Richard Safran

So I wanted to ask you guys about rotorcraft. There's a bit of concern out there, Army budgets are under some pressure in fiscal '27 request. So I want to know if you could go into what, if anything, does that mean for Hexcel next year? And part 2 of that question is that, you've mentioned CH-53K, UH60 and more recently, the V75, I just wanted to know what your base you're baking into your outlook here.

Unknown Executive

Right. Well, Rotorcraft is a very big product segment for us. And as you indicated, the CH-53K is our biggest program. So we have about $2.5 million to $3.5 million per shipset on the CH-53K. We have the whole material system, all the carbon fiber all the resin plus some of the structures as well. That aircraft, of course, is for the Marines, not the army. And so that's one thing about it. It's got a program of record of 200 units. And we are on track to -- I think Sikorsky has indicated they want to get up to about 24 per year, and they're on pace to achieve that. So that's going to be a good program for us for a long period of time. And in addition to the 200 sales program of record, they've also done some foreign military sales initially to Israel, about 15 or 16 units and then possibly more in the future.

So that's in terms of rotorcraft, that's the marine. On the Army, we still have a huge position with the Black Hawk. We do the bars. Our ship set value that we've talked about is between $200,000 and $500,000 per shipset. And the Black Hawk, there's about 3,000 units in the U.S., and then there's a lot of units overseas. That program is likely to go for a very long time into the future. They already have firm orders through 2032. And not only do we do new production, but because we do the spares on the blades to the Black Hawk, there's a lot of aftermarket too. And so as it gets a lot of utilization, we'll see that.

And so we see the Black Hawk as a very good program for many years in the future. Sikorsky is upgrading the engines on it. They're also putting in place autonomy. So it's going to be a very capable aircraft. You mentioned the MV-75, that Textron is building. That is also going to be a great aircraft, but that's still several years out in terms of when it enters into service. We have been talking to the Textron about material packages on that. We see it's going to be a great program. But again, it's a few years out. So it doesn't impact us in the next few years.

Other Army helicopters like the CH-47 are mostly metallic. And so we have some shipset content on them, but it's not material. The other thing about rotorcraft is we do a lot with Airbus. We do a lot with Turkey and TAI. We do a lot with HAL in India. And so our rotorcraft exposure is much broader than just Army aircraft. As I said, includes the CH-53K. It includes Airbus and TAI and HAL. And then we still have a very strong position on the Black Hawk and then we'll have a good position in the future on the MV-75.

Operator

Your next question comes from the line of David Strauss from Wells Fargo.

David Strauss

Tom, on the A350 and your forecast to get to 100 in '27. I would have thought if Airbus is actually going to get to '28 -- or sorry, 12 a month in 2028 that you would actually -- given your lead times that we would be looking at actually more than 100 shipsets in 2027?

Thomas Gentile

Well, what I would say is we've looked at it, and that's the number that we think is consistent with that target. And it will go up a little bit more in 2028. When they say they're going to get to 12 aircraft per month in 2028, it won't be on a full year run rate. You probably won't see that until 2029. So if you think about 132 in 2029, which is over craft per month, for Airbus with the one month off in August. We see the run rate in '27, '28 and then feeding into 132 in '29 as consistent. So 100 next year is right in line with that outlook.

David Strauss

Okay. And a quick follow-up. I don't know if you wanted to offer any comments as we're looking at 2027, consensus right now is for low double-digit revenue growth, and I think somewhere kind of in the low 30% incremental margins. Is that a reasonable framework to think about for 2027 at this point?

James Coogan

Yes. Jamie, why don't you do? So I think as we're going through right now pulling together our expected once for 2027. We wanted to make sure we talked about our expectations around A350. As you said, so we'll have more information on our full year outlook and expectations across the portfolio of products when we issue our results for 2020 -- results at the end of the year for 2026. So more to come on that. But generally speaking, we expect revenue growth into next year. We expect that to result in some higher absorption of the fixed cost base over that period of time. And we're going to see some of the near-term headwinds that we have today will result in some favorable performance as we move through next year.

But we have to remind folks that some of the hiring that we've done here in the second half of 2026 is going to continue to provide a little bit of headwind going into the first part of the year, given that there's some training and inefficiencies that come with onboarding the number of folks that we're bringing on board.

Operator

Your next question comes from the line of Jason Holcomb from Morgan Stanley.

Jason Holcomb

Can you talk more about what you're seeing for demand in 4Q and 2027 that is driving the pull forward and hiring and the new lines coming on. Is it primarily the higher commercial rates? Is it a greater pull for maybe defense and space? I mean any additional details you can share would be great.

Unknown Executive

Yes. Well, on the commercial programs, let's just go through them. A350, in the last quarter, they were at about 7 per month, and we expect that to continue into the fourth quarter, maybe tick up a little bit as Airbus pushes for their year-end. And then I explain the outlook for 2027 based on the different triangulations that we do. On the 320, Airbus is running about 55. That probably will step up. Airbus is still saying they're going to get to 870 deliveries for the full year. So they're pushing hard in Q4. And they said that everything they need to produce those aircraft is already in their final assembly line in to loosen Hamburg and TNG and Mobile. So I think they have good confidence in that. In Airbus, we actually saw a full of 10 on the 787 in the last quarter. And we've been calling 90 to 100 for the year, and they're on track for that, maybe even a little bit above. And on the 737, they've been pulling at about 41 for us. We're estimating a 500 for the year, and they seem to be on track for that, maybe even a little bit higher.

So on all the commercial programs, we see fourth quarter continuing in the same trend with some strong upside. Boeing and Airbus always close the year strong, and we don't expect this year to be any different. And then we also expect Q4 to be a little bit better on defense and space. As we said, our fighter programs had off orders. F-35 was kind of soft, but you just saw the big deal this morning, and Lockheed 10 years at 156 aircraft a year. So we're not worried about the upper being soft in the quarter. That's just some toppiness. -- and that's not going to continue. So we have got great confidence in defense and space continuing to increase. What we saw, as I mentioned in my comments, on space, for example, is launches were pretty slow.

Launch has seen this year to be a little bit lower than they were last year. SpaceX has been the dominant player on that. They don't use much composite today. on their launching systems. We have some content, but not a lot. And the other launcheresult have been slower this year as a regroup from some issues that they had. And so we expect that to start to pick up not the fourth quarter but into 2027.

Operator

Your next question comes from the line of Noah Poponak from Goldman Sachs.

Noah Poponak

Just to follow up right there. The full year revenue range implies that 4Q growth would be pretty strong and acceleration from what you've seen earlier in the year. So I guess, what's the split of, I guess, defense and commercial in that? Or to what extent does that count on the defense slippage coming right back in the fourth quarter versus moving into next year? And then a second question I had, Jamie, you stated that your biggest focus, highest priority is margin expansion. Can you talk about where you think margins can go long term? And can you maybe -- I don't know if it's possible to quantify how much more spending you guys see in the near term related to the investments you've described?

Thomas Gentile

Okay. Let me take the first part of that, which is the 2026 growth story. Q4, we see it stronger, obviously, sequentially to close the year. We are still targeting at least midrange of our guidance and possibly slightly above that. And it really the split between commercial and defense is going to be our kind of normal 65-35 split. So nothing extraordinary about that. And on margins, I would say is Jamie has come in and brought some new perspectives. And I've asked him to take this lead on driving a very comprehensive margin improvement story. And maybe, Jamie, you could talk a little bit about that on where you see that opportunity.

James Coogan

Yes, absolutely. And so we talked about historically, we had about a 200 basis point gap from a prior peak margin rates, just getting some cost inflation and other pressures that we've seen across the supply chain. Our objective in undertaking these margin expansion initiatives is to close that gap. And so as we've talked about getting back to our prior peak rates, we've got 200 basis points lower. And then at our higher revenue levels, we could hone in on about 18% overall EBIT margins for the business. The opportunity here would be for us to drive above that 18% to close that 200 basis point gap, and we can see the opportunity to approach somewhere close to 20%, given the initiatives that we're going to put in place to be able to do that. It's a combination of factors. So there's going to be some level of G&A efficiency that we undertake.

There's some level of continuous improvement initiatives to improve our yields and efficiencies in our production processes. But I think most importantly, it's price realization and our LTA renegotiations and making sure that we capture value for the product and technologies we're providing to our customers.

Thomas Gentile

And then I know you asked about spending CapEx to hit the near-term production ramp. And we said about $100 million. It's going to be in that range of the next few years, possibly a little bit higher because don't forget, before the pandemic, we started a coin in Takeda, Alabama, a new carbon line and a new panline are precursor. We're going to pull those forward. And so there'll be a little bit of spending over the next few years, but it's still going to be in the range of $100 million, $125 million as we go forward. We don't need to do any significant capital expenditure until the early 2030s if rates go up on the A350 or when we start to contemplate the next-generation single-aisle -- but for the near term, it's going to be in the range that we've described.

Noah Poponak

And Tom, just on P&L spending. So in the quarter, the discussion of incremental spending related to hiring and other drivers of forward growth. And then you guys have discussed maybe there's a little bit more of that in the near term that maybe pressures what the incremental would otherwise be. Can you quantify over the next few quarters, how long do you have to do that? And what does it do to the incremental or the year-over-year change? Or what is it in absolute dollars, any framing you can help with for modeling the near-term margins?

Thomas Gentile

Right, right. Well, as we said for this year, we're holding to our guidance. And so that gets us to about 13% for the full year in terms of operating margin. And in terms of incrementals, we've always said mid-30s, mid- to high 30s, and it's going to end up in that range. And then going into next year, we expect with continued operating leverage as these hires come on board, that will also support the margin.

And as Jamie said, we've got a clear path to the 18%, but we're going to be looking at higher potentially up to 20% as we go forward. And it will be a straight line from 2027 as the volume comes in.

Operator

Your next question comes from the line of Ken Herbert from RBC. [Operator Instructions] Ken, please rejoin the queue if you'd like to ask a question. Your next question comes from the line of Ronald Epstein from Bank of America.

Ronald Epstein

I was wondering if you could speak to -- we've got 2 new awards out there for 6 gen fighters at Boeing and what kind of opportunity does that present for you guys? I would imagine those things must be to their eyeballs and Advanced Materials.

Thomas Gentile

Right. Both of those, the sixth generation for the Airforce and the Navy, Boeing, on both of them. So congratulations to them. Those were very intense competitions over many years. Those programs, because there's low observability and they're trying to increase range, there's a huge incentive for them to use lightweight materials like carbon fiber composite. And so we certainly will be working with Boeing to position for that. They developed just demonstrators using existing material systems that the military is used for many years. And if you go back many years to the F-18 and the F-22 and the P2 and then the F-35, that material system has always been Hexcel carbon fiber and then using resin from science Co.

And so those that material system was part of the demonstrators. And so as they go into production, that's something that we will be talking to Boeing about as they finalize those programs. But it does represent good opportunity. sixth generation fighters are going to depend on range and they're going to depend on low observability. And those are 2 things that lightweight composite material really excels at because it's 5x stronger than aluminum and 30% lighter. And so it does help increase range and reduce fuel consumption. And it also enables architectures that promote global servability.

Ronald Epstein

Got it. Got it. And then in the press release and in the presentation, you guys mentioned that there was a little bit of softness with launches and rocket motors, which seems a little counterintuitive with what's going on. Just curious if it's a timing thing or what's going on there? .

Thomas Gentile

Well, as I was saying, launches this year look a little bit lighter than last year and most of them are SpaceX. And SpaceX has been pretty public about not using composite yet in their launch vehicles. And so some of the other launchers that use a lot of carbon fiber composite haven't had as many launches this year if you look at the numbers. And so we have bigger shipsets on some of those other folks. And for various reasons, that have been well documented in the press, they are in a pause. And so that will start to pick up as they resolve the issues that they encounter.

Operator

Your next question comes from the line of Peter Skibitski from Alembic Global.

Peter Skibitski

Tom, you a little earlier to the new Lockheed F-35 contract the 10-year. Just curious, I don't know if they let suppliers and yet kind of in terms of the terms and conditions as they were working the contract with the Pentagon or if it was brand new to you today. But I was just wondering conceptually how you think about the impact of Hexcel from a from that level of visibility on that program?

Thomas Gentile

Yes, we don't know yet. I mean I literally just read it before I came in to this call in the trade press. A 10-year deal that is looking at 156 aircraft per year. So it goes out quite a long way. Don't know what the conditions are and how those will flow down. I assume they'll be pretty typical. The program has already been in existence for a long time. But I thought it was just encouraging is that there is a huge demand signal. It's multiyear, and that program is going to extend many years into the few, which is good for us because we have a significant position on it. But it's great I think our defense forces and our war fighters because that's a very capable aircraft, all 3 versions of it. So it was great news to read this morning.

Peter Skibitski

Okay. Great. Just one follow-up for me. notwithstanding your prior comments about production rates on the commercial side, but you had Airbus strike in Spain over the quarter or so and then obviously some riot issues in France. Have you noticed any incremental changes to demand pull that you thought might be a result of the strikes that will be now that they're settled that they will kind of accelerate now there? And then with the riots do you think impact either your supply chain or your French facilities and all of those.

Thomas Gentile

Great. Regarding Spain, as you said, they did resolve the labor issues, and we didn't see any impact at all on production or pull. And similar with the situation in France, we haven't seen any impact as a result of that. We obviously will monitor it and we read about it in the press. We talked to Airbus very frequently. But so far, we have not seen any impact from those issues.

Operator

Your next question comes from the line of Gautam Khanna from Cowen.

Gautam Khanna

I was wondering just to follow up on an earlier question on the A350 inventory that's in the channel, if you could describe maybe how aligned the various customers that you ship to are in terms of how much they're pulling from Hexcel. And maybe if you could give us an update, like through Q3, how many shipset equivalents you think you've actually moved into the channel? And just again, fundamental question is really around like confidence that what happened last year doesn't happen maybe early next year where you're shipping ahead and then they just kind of pull back or keep you flatter for longer. What -- what gives you that second break.

Thomas Gentile

Well, so as I said, last quarter, they pulled at about 7. So that would be 21. So we've had probably about the equivalent of 60, 65 already pulled for the year, which leaves them with another 20 or so for the last quarter, which is very achievable at the rate of 7. So we see them perfectly in line with what we have called in our guidance. And we talked to Airbus, we talked to all of the locations. As I said, there's about 15, some of them are part of Airbus like us Atlantic, not Kinston, or Northrop in Salt Lake City or Airbus Aerostructures in Germany. So a lot of different locations that are getting material.

We talk to them when we talk about their outlook. And that's why we have confidence in the fourth quarter outlook. In terms of inventory in the channel, one of the things that Airbus has said is that it's in interiors and seats that have been one of the drawbacks Well, you can build a plane without insurers and seats. And then when they come, you can finish the airplane off and deliver it. And so there's no doubt some of that, that's happening. But as we said, we're not too concerned about 2027 because we see this demand signal of 100 units next year, an increase from this year. So we see strong demand pull throughout the year, year-to-date, as I said, in the 60 to 65, strong demand signals with firm purchase orders for Q4 and then equally strong demand signals going into 2027.

Gautam Khanna

I guess what I'm asking those, how does that differ than like what -- how you felt a year ago? Because if you remember, there was a similar dynamic. Was there just not the same demand signals -- in late '25 or 2026. Well, what makes the difference?

Thomas Gentile

Well, 2025 were the exact opposite. When we were in the middle of 2024, there was indications that in '25 might have 98 units, and then it dropped to 94. We built our plan at 84, and eventually, they delivered 57. So it kind of dropped throughout the year, and we could see that and we reflected it. If you recall, we actually dropped our guidance twice in 2025. This year, we've seen the opposite. We've seen the demand signals continue to strengthen and go up as we've gone throughout the year, which is why we pulled the trigger on all the hiring and the startup of the lines because we're seeing the demand and we're leaning into it.

And that's the big difference and last year, it was the other way this year, it's all positive and growing and the production have been increasing exactly in line with their public statements.

Operator

Your next question comes from the line of Myles Walton with Wolf Research.

Myles Walton

One clarification and one question. On the clarification, was the tax rate implied in the new EPS guidance has been reiterated? Is it 17%? And then a question for Tom. Can you just comment on the China carbon fiber for aerospace applications. I know one of the larger firms they open T1100 IM10 type grade product line this summer starting low quantities, but I'm just curious if you think that there are future competitor review on, say, an Airbus platform?

James Coogan

Yes. So on the tax rate assumption, so kind of in that 17% to 18% range for the fourth quarter time frame. We do expect that tax rate for the full year to be sort of maybe slightly north of 16% for the full year period, but modestly higher here in the fourth quarter as we close the year out within that range.

Thomas Gentile

Good. And then regarding China, yes, at JEC, there was one of the Chinese companies that did indicate they had a version of T1100, what we call IM 10 or 11 that they were making. So we don't know yet how far along they are in terms of getting it qualified. It's not on any programs today. So there's still probably work for them to do to finalize it, qualify it and then be able to industrialize it for aerospace programs and then get it put on to the program. It's not realistically a competitor on current generation programs with Airbus or Boeing, next generation depending on how far out it is, perhaps they could compete.

There are some geopolitical issues that people would probably want to take into account as well. But we watch it carefully. They're capable in China, so we don't certainly disregard them, and they have great resources. But at this point, I think it's still a bit early for them to be a competitor, certainly on current generation products, maybe for the next generation, but we'll see.

Operator

Your next question comes from the line of Sheila Kahyaoglu from Jefferies.

Sheila Kahyaoglu

So I wanted to ask on margins. You've hired about 525 people year-to-date. You're going to do more assuming that number gets up to 700 or so, do we think about your excess costs as being about $50 million this year and how that translates into '27? And just as we think about the higher COGS. I know you have a hedging plan and procurement contracts that kind of spread that cost. How do you, I guess, see those 2 items, both labor and raw material inputs factoring into margins in '27?

James Coogan

Yes. So as we think about that, there's a bit of a rolling cadence there. So we have the heads, the heads come up where there's a bit of an inefficiency training, start costs that occur, the volume fills in and we get absorption benefit from the efficiency as we bring those individuals on board. And so as we hire, right, so one of the dynamics here in the third quarter was we had lower volume given the seasonality, and we were hiring to support, right? So that put a little bit of incremental pressure on margin in the third quarter time frame, which we didn't see last year because of -- as Tom noted, we saw a falling demand environment in the back half of last year, whereas today, we see a rising demand environment coming into this third quarter of this period. So we expect that trend to continue a little bit into the fourth quarter here as we do the hiring.

We have that baked into our expectations for the 2026 time frame. As it relates to '27, we would expect maybe a little bit of first half inefficiency from the hiring we did in the fourth quarter and third quarter time frame until they get fully up to speed. But then again, as we move through the course of the year, we would gain efficiencies and the absorption on the higher volume and see margins improve.

Thomas Gentile

Right. And as we said, our target as we get up to the full rate of production is we see a path to the 18% margin. But with better price realization, we think that could go as high as 20% by the end of the decade. Now you also asked about hedging and cost of goods sold. As Jamie mentioned, oil prices are going up. Acrylonitrile is a petroleum derivative, but we do hedge that. We hedge propylene, which is also a byproduct of petroleum as a surrogate. And that's an 8-quarter hedge. So we are cushioned from some of the high spikes that we've seen in oil pricing and what the impact could be on acrylonitrile.

But as Jamie also said, acrylonitrile, while it's the core basis of carbon fiber, it's only single digits in terms of cost for us in terms of revenue. So there's all the value added that comes afterwards, which makes up our product. Acrylonitrile is a relatively small purchase for us.

James Coogan

And the variability we would see is going to be relatively small because of the mitigation programs we put in place.

Operator

Thank you for your questions. There are no further questions at this time. This concludes today's call. Thank you for attending. You may now disconnect.