Hexcel (HXL) Reports Loss in Q4, Misses Revenue Estimates

Zacks Equity Research
·3 min read

Hexcel Corporation HXL reported a fourth-quarter 2020 loss of 18 cents per share, in line with the Zacks Consensus Estimate. The bottom line, however, declined from the prior-year quarter’s earnings per share of 86 cents. The year-over-year downside can be attributed to poor sales figures.

The company reported a GAAP loss of 23 cents per share against the year-ago quarter’s earnings of 86 cents.

For 2020, Hexcel's earnings were 25 cents per share, down 92.9% from $3.54 in the year-ago period. The full-year earnings figure missed the Zacks Consensus Estimate of 26 cents by 4%.

Total Sales

Net sales totaled $295.8 million, missing the Zacks Consensus Estimate of $297 million by 0.4%. Moreover, the top line witnessed a decline of 47.6% from the year-ago quarter’s $564.3 million.

The year-over-year deterioration in sales can be primarily attributed to the impacts of the pandemic, leading to an unprecedented decline in demand, affecting the aerospace industry.

In 2020, total revenues declined 36.2% year over year to $1,502.4 million. Moreover, the full-year revenue figure missed the Zacks Consensus Estimate of $1,510 million by 35.9%.

Operational Update

Hexcel’s gross margin was 10.3% in the fourth quarter compared with the year-ago quarter’s 26%.

The company’s operating expenses amounted to $50.8 million in the fourth quarter compared with the year-ago quarter’s $49.1 million.

Quarterly Performance

Commercial Aerospace: Net sales were down 66.6% year over year to $126.7 million. Lower sales across all major programs, with the Airbus A350 generating the largest quarterly revenue decline, resulted in this unit’s poor top-line performance.

Space and Defense: Net sales were up 3.8% year over year to $119.7 million due to strength in U.S. military rotorcraft programs.

Industrial: Net sales declined 28.6% year over year to $49.4 million, primarily due to lower wind energy sales on account of a customer demand shift, primarily in the U.S. market, and the impact of the November 2020 closure of Hexcel’s wind energy prepreg production facility in Windsor, CO.

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

Financial Details

As of Dec 31, 2020, cash and cash equivalents were $103.3 million compared with $64.4 million as of Dec 31, 2019.

Long-term debt totaled $925.5 million as of Dec 31, 2020, down from $1,050.6 million as of Dec 31, 2019.

At the end of fourth-quarter 2020, cash generated from operating activities summed $264.3 million compared with $491.1 million generated at the end of fourth-quarter 2019.

2021 Guidance

Hexcel continues to withhold its financial guidance in the wake of the ongoing market uncertainties as a result of the pandemic.

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.

Upcoming Defense Releases

Boeing BA, a Zacks Rank #3 company, will release results on Jan 27.

Northrop Grumman NOC, a Zacks Rank #3 company, is set to release results on Jan 28.

Huntington Ingalls Industries HII, a Zacks Rank #3 company, is set to release results on Feb 11.

Just Released: Zacks’ 7 Best Stocks for Today

Experts extracted 7 stocks from the list of 220 Zacks Rank #1 Strong Buys that has beaten the market more than 2X over with a stunning average gain of +24.4% per year.

These 7 were selected because of their superior potential for immediate breakout.

See these time-sensitive tickers now >>


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
 
Hexcel Corporation (HXL) : Free Stock Analysis Report
 
Huntington Ingalls Industries, Inc. (HII) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research