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Hexcel Corporation HXL reported first-quarter 2025 adjusted earnings of 37 cents per share, which declined 15.9% from the year-ago quarter’s figure of 44 cents. The bottom line also lagged the Zacks Consensus Estimate of 43 cents by 14%. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The company reported GAAP earnings of 35 cents per share, which declined 18.6% from the year-ago quarter’s figure of 43 cents.
The year-over-year bottom-line decline can be attributed to lower net sales and operating income compared with the prior-year quarter.
HXL’s Total Sales
In the first quarter, the company’s net sales totaled $456.5 million, which lagged the Zacks Consensus Estimate of $475 million by 3.8%. The top line also fell 3.3% from the year-ago quarter’s reported sales of $472.3 million.
The year-over-year decline can be attributed to lower sales from the Commercial Aerospace market.
Hexcel Corporation Price, Consensus and EPS Surprise
Hexcel Corporation price-consensus-eps-surprise-chart | Hexcel Corporation Quote
Hexcel’s Operational Update
Hexcel's gross margin in the first quarter was 22.4%, which contracted 260 basis points from the prior-year quarter. The decline in the gross margin can be attributed to lower sales leverage.
Selling, general and administrative (SG&A) expenses decreased 11.6% year over year to $43.3 million in the first quarter. Meanwhile, research and technology expenses for the first quarter of 2025 dropped 8.6% year over year to $13.8 million.
HXL’s adjusted operating income was $45.3 million in the quarter compared with $54.1 million in the year-ago period.
HXL’s Contribution From Different Markets
Beginning from the first quarter of 2025, Hexcel’s sales are reported for two markets, which include Commercial Aerospace and Defense, Space & Other (which combines the previous Space & Defense market and Industrial market).
Commercial Aerospace: Net sales decreased 6.4% year over year to $280.1 million due to lower Boeing 787 and MAX sales.
Space and Defense: Net sales rose 2% year over year to $176.4 million. This increase was led by strong sales volume from the CH-53K and Black Hawk helicopter programs and classified programs, a number of Space programs and an international fighter program. Sales growth for automotive also contributed to sales growth for HXL from the Space and Defense market.
HXL’s Financial Details
As of March 31, 2025, Hexcel’s cash and cash equivalents were $89.2 million compared with $125.4 million as of Dec. 31, 2024.
The company’s long-term debt totaled $787.1 million as of March 31, 2025, up from $700.6 million as of 2024-end.
In the first quarter of 2025, HXL’s cash used in operating activities was $28.5 million compared with cash used of $7 million in the year-ago period.
Hexcel’s adjusted free cash outflow as of March 31, 2025 was $54.6 million compared with adjusted free cash outflow of $35.7 million in the year-ago period.