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Hexcel (HXL) Q4 Earnings Beat Estimates, Sales Rise Y/Y

Hexcel Corporation HXL reported fourth-quarter 2022 adjusted earnings of 40 cents per share, which beat the Zacks Consensus Estimate of 31 cents by 29%.

The bottom line improved massively from the year-ago earnings of 16 cents per share, implying solid growth of 150%.

In the quarter under review, the company posted GAAP earnings of 43 cents per share compared with the prior-year quarter’s earnings of 22 cents.

For 2022, the company reported adjusted earnings of $1.28 per share, which improved a solid 374.1% from the year-ago figure of 27 cents.

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

Total Sales

In the fourth quarter, net sales totaled $429.4 million, which beat the Zacks Consensus Estimate of $404 million by 6.7%. Also, the top line witnessed an improvement of 19.2% from the year-ago quarter’s $360.3 million.

For 2022, the company recorded revenues worth $1,578 million, up 19.1% from 2021’s reported figure.

Operational Update

Hexcel's gross margin in the fourth quarter was 23.1% compared with 19.2% in the prior-year period, driven by higher sales.

Selling, general and administrative expenses increased 26.3%, whereas research and technology expenses for the fourth quarter of 2022 rose 3.4% year over year.

HXL’s adjusted operating income was $46.3 million in the quarter compared with $25.2 million in the year-ago period.

Segmental Performance

Commercial Aerospace: Net sales increased 28.3% year over year to $256.2 million, driven by growth in all the major platforms, including the Airbus A350 and A320neo, and the Boeing 787 and 737 MAX.

Space and Defense: Net sales increased 19.5% year over year to $126.5 million. The increase can be attributed to global strength witnessed across the entire sector.

Industrial: Net sales decreased 14.6% year over year to $46.7 million primarily due to lower wind energy sales.

Financial Details

As of Dec 31, 2022, cash and cash equivalents were $112 million compared with $127.7 million as of Dec 31, 2021.

The long-term debt totaled $723.3 million as of Dec 31, 2022, down from $822.4 million as of 2021-end.

In 2022, the company’s cash flow from operating activities was $173.1 million compared with $151.7 million in the prior-year period.

Hexcel’s adjusted free cash flow for 2022 was $96.8 million compared with $123.8 million in the prior-year period.

2023 Guidance

The company provided its 2023 financial guidance.

Hexcel expects to generate sales of $1.725-$1.825 billion. The Zacks Consensus Estimate for sales, pegged at $1.72 billion, is almost in line with the lower end of the company's guidance range.

The company expects to generate adjusted earnings per share of $1.70-$1.90 in 2023. The Zacks Consensus Estimate for sales, pegged at $1.72 per share, is lower than the mid-point of the company's guidance range.

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.

Recent Defense Releases

Lockheed Martin Corporation LMT reported fourth-quarter 2022 adjusted earnings of $7.79 per share, which surpassed the Zacks Consensus Estimate of $7.41 by 5.1%. The bottom line also improved 7.9% year over year.

In the reported quarter, net sales amounted to $19 billion, which surpassed the Zacks Consensus Estimate of $18.25 billion by 4.1%. The top line rose 7.3% from $17.7 billion reported in the year-ago quarter.

Raytheon Technologies Corporation’s RTX fourth-quarter 2022 adjusted earnings per share (EPS) of $1.27 beat the Zacks Consensus Estimate of $1.24 by 2.4%. Moreover, the bottom line improved 18% from the year-ago quarter.

Raytheon Technologies’ fourth-quarter sales of $18,093 million missed the Zacks Consensus Estimate of $18,196 million by 0.6%. The sales figure, however, rose 6% from $17,044 million recorded in the year-ago quarter.

General Dynamics Corporation GD reported fourth-quarter 2022 earnings per share (EPS) of $3.58, which beat the Zacks Consensus Estimate of $3.53 by 1.4%. Quarterly earnings increased 5.6% from $3.39 per share in the year-ago quarter.

General Dynamics’ fourth-quarter revenues of $10,851 million beat the Zacks Consensus Estimate of $10,674 million by 1.7%. Revenues also improved 5.4% from the year-ago quarter.

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General Dynamics Corporation (GD) : Free Stock Analysis Report

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