Earnings Review and Free Research Report: Hexcel Reported Q2 Results; Raised Dividend by 13.6%

Research Desk Line-up: General Dynamics Post Earnings Coverage

LONDON, UK / ACCESSWIRE / August 1, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Hexcel Corp. (NYSE: HXL), which can be viewed by registering at http://protraderdaily.com/optin/?symbol=HXL, following the Company’s announcement of its second quarter fiscal 2017 earnings results on July 24, 2017. The maker of lightweight composite materials saw sales and revenue numbers fell short of market estimates. The Company also revised its outlook for the year. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member’s account at:

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Get more of our free earnings reports coverage from other constituents of the Aerospace/Defense Products & Services industry. Pro-TD has currently selected General Dynamics Corporation (NYSE: GD) for due-diligence and potential coverage as the Company reported on July 26, 2017, its financial results for Q2 2017. Register for a free membership today, and be among the early birds that get access to our report on General Dynamics when we publish it.

At Pro-TD, we make it our mission to bring you news that matter about the stock you follow. Today, our research desk covers a blog story on HXL also brushing on GD. With the links below you can directly download the report of your stock of interest free of charge at:

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Earnings Reviewed

For the three months ended June 30, 2017, Hexcel reported sales of $491.3 million compared to sales of $522.6 million for Q2 2016. The Company’s reported quarter sales were 5.4% less in constant currency on a y-o-y basis. Hexcel’s revenue numbers came in below analysts’ forecasts of $518.29 million.

During Q2 2017, Hexcel’s gross margin was 28.5% compared to 28.8% in Q2 2016, reflecting strong operating performance. The Company’s selling, general, and administrative expenses for the reported quarter were slightly lower in constant currency on a y-o-y basis as it maintained tight cost control. Hexcel’s adjusted operating income in Q2 2017 was $89.7 million, or 18.3% of sales, compared to a record $100.1 million, or 19.2% of sales, in Q2 2016.

Hexcel posted net income of $61.6 million, or $0.67 per diluted share, compared to net income of $66.1 million, or $0.70 per diluted share, in Q2 2016. The Company’s adjusted income totaled $0.67 per diluted share, down 4.3% on a y-o-y basis. Hexcel’s earnings numbers fell short of Wall Street’s expectations of $0.69 per share.

Segment Results

During Q2 2017, Hexcel’s Commercial Aerospace sales were $349.0 million, declining 5.3%, or 5.2% in constant currency, compared to Q2 2016. The segment’s sales for H1 2017 were 2.8% lower in constant currency on a y-o-y basis. The Company stated that sales decline in certain legacy widebody sales more than offset growth of the A350 and the new narrowbodies.

For Q2 2017, Hexcel’s Space & Defense sales were $87.8 million, rising 7.3%, or 8.4% in constant currency, compared to the year ago same period, with growth reported across all key programs. The Company stated that during the reported quarter, Rotorcraft sales, which comprise just over half of Space & Defense sales, were at their highest level in two years. For H1 2017, Space & Defense sales of $164.5 million grew 3.5% on a y-o-y basis.

During Q2 2017, Hexcel’s Industrial sales totaled $54.5 million, down 24.6%, or 22.3% in constant currency, compared to Q1 2016. Industrial segment’s sales for H1 2017 were $109.4 million, or 19.3% lower in constant currency than H1 2016 sales. The Company observed that wind energy sales, the largest submarket in Industrial segment, are experiencing a challenging year and was down more than 30% for both Q2 and H1 2017. Hexcel is forecasting wind energy sales in 2018 to exceed 2016 levels, as various legacy blades with lower composite content transition to longer, higher efficiency blades with higher composite content.

Cash Matters

During H1 2017 Hexcel generated free cash flow of $13 million versus utilization of $21 million in H1 2016. The Company’s working capital decreased $33 million in Q2 2017 resulting in a use of $7 million in H1 2017 compared to a $72 million use in H1 2016. The primary driver was an improvement in receivables due to lower sales and continued strong collections. Hexcel stated that its free cash flow has seasonal fluctuations with the second half tending to be a significant source of cash compared to the first half.

During Q2 2017, Hexcel used $57 million to repurchase shares of its common stock and has $272 million remaining under the authorized share repurchase program.

Announced in a separate press release on the same day, Hexcel’s Board of Directors declared a 13.6% increase in the quarterly dividend from $0.11 per share to $0.125 per share. The dividend will be payable to stockholders of record as of August 03, 2017, with a payment date of August 10, 2017.

Outlook

Hexcel revised its FY17 sales forecasts to be approximately $2.0 billion from the previous range of $2.0 billion to $2.08 billion. The Company’s projection for adjusted diluted earnings per share is in the range of $2.64 to $2.76, and free cash flow greater than $100 million remained unchanged for FY17.

Stock Performance

At the closing bell, on Monday, July 31, 2017, Hexcel’s stock slipped 1.37%, ending the trading session at $51.17. A total volume of 527.37 thousand shares have exchanged hands. The Company’s stock price rallied 0.08% in the last three months, 1.33% in the past six months, and 18.53% in the previous twelve months. The stock is trading at a PE ratio of 18.75 and has a dividend yield of 0.98%. The stock currently has a market cap of $4.64 billion.

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