Hexcel Q2 Earnings Beat Estimates, Sales Decline Y/Y

Hexcel Corporation’s HXL share price dropped 2% to reach $61.11 on July 25, following the company’s latest quarterly release.Hexcel reported second-quarter 2025 adjusted earnings of 50 cents per share, which declined 16.7% from the year-ago quarter’s figure of 60 cents. However, the bottom line surpassed the Zacks Consensus Estimate of 46 cents by 8.7%.The company reported GAAP earnings of 17 cents per share, which declined 71.7% from the year-ago quarter’s figure of 60 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 SalesIn the second quarter, the company’s net sales totaled $489.9 million, which beat the Zacks Consensus Estimate of $471 million by 4%. However, the top line fell 2.1% from the year-ago quarter’s reported sales of $500.4 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 QuoteHexcel’s Operational UpdateHexcel's gross margin in the second quarter was 22.8%, which contracted 250 basis points from the prior-year quarter. The decline in the gross margin can be attributed to lower sales, and inventory reduction actions drove unfavorable cost leverage.Selling, general and administrative (SG&A) expenses increased 7.8% year over year to $43 million in the second quarter. Meanwhile, research and technology expenses for the second quarter of 2025 dropped 2.7% year over year to $14.3 million.HXL’s adjusted operating income was $54.2 million in the quarter compared with $72 million in the year-ago period.HXL’s Contribution From Different MarketsBeginning 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 8.6% year over year to $293.1 million due to lower sales from each of the four major programs, including the Airbus A350 and A320neo and the Boeing 787 and 737 MAX.Space and Defense: Net sales rose 9.5% year over year to $196.8 million. This increase was led by strong sales volume from the Sikorsky CH-53K, two international fighter programs and space programs, including launchers, rocket motors and satellites.HXL’s Financial DetailsAs of June 30, 2025, Hexcel’s cash and cash equivalents were $77.2 million compared with $125.4 million as of Dec. 31, 2024.The company’s long-term debt totaled $827.7 million as of June 30, 2025, up from $700.6 million as of 2024-end.During the first six months of 2025, HXL’s cash used in operating activities was $5.2 million against the cash inflow of $37.2 million in the year-ago period.Hexcel’s adjusted free cash outflow as of June 30, 2025 was $46.6 million compared with adjusted free cash outflow of $14.4 million in the year-ago period.Hexcel’s 2025 GuidanceHexcel reiterated its guidance for 2025. The company still expects to generate sales in the band of $1.88-$1.95 billion in 2025. The Zacks Consensus Estimate, pegged at $1.91 billion, lies just below the midpoint of the company's guidance range.HXL still expects its adjusted earnings per share in the range of $1.85-$2.05 in 2025. The Zacks Consensus Estimate, pegged at $1.87, lies near the lower end of the company's guidance range.Hexcel still expects to generate free cash flow of approximately $190 million in 2025. Its capital expenditure outlook still remains less than $90 million.HXL’s Zacks RankHexcel currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Recent Defense ReleasesGeneral Dynamics Corporation GD reported second-quarter 2025 earnings per share of $3.74, which beat the Zacks Consensus Estimate of $3.59 by 4.2%. The bottom line also increased 14.7% from $3.26 recorded in the year-ago quarter. Revenues of $13.04 billion topped the Zacks Consensus Estimate of $12.35 billion by 5.6%. The top line also improved 8.9% from the prior-year figure.L3Harris Technologies, Inc. LHX reported second-quarter 2025 adjusted earnings (from continuing operations) of $2.78 per share, which beat the Zacks Consensus Estimate of $2.48 by 12.1%. The bottom line also increased 15.8% from the year-ago quarter’s $2.40.L3Harris’ revenues totaled $5.43 billion, which beat the Zacks Consensus Estimate of $5.30 billion by 2.3%. The top line also improved 2.4% from the year-ago quarter’s $5.30 billion.Textron Inc. TXT reported second-quarter 2025 adjusted earnings of $1.55 per share, which surpassed the Zacks Consensus Estimate of $1.45 by 6.9%. The bottom line also rose 0.6% from $1.54 in the year-ago quarter. The company reported total revenues of $3.72 billion, which beat the Zacks Consensus Estimate of $3.63 billion by 2.4%. Moreover, revenues increased 5.4% from the year-ago quarter’s level of $3.53 billion.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the favorite stock to gain +100% or more in the months ahead. They includeStock #1: A Disruptive Force with Notable Growth and ResilienceStock #2: Bullish Signs Signaling to Buy the DipStock #3: One of the Most Compelling Investments in the MarketStock #4: Leader In a Red-Hot Industry Poised for GrowthStock #5: Modern Omni-Channel Platform Coiled to SpringMost of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor. While not all picks can be winners, previous recommendations have soared +171%, +209% and +232%.Download Atomic Opportunity: Nuclear Energy's Comeback free today.Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report General Dynamics Corporation (GD): Free Stock Analysis Report Textron Inc. (TXT): Free Stock Analysis Report Hexcel Corporation (HXL): Free Stock Analysis Report L3Harris Technologies Inc (LHX): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks