Hexcel Corporation HXL reported second-quarter 2021 adjusted earnings of 8 cents per share, which exceeded the Zacks Consensus Estimate of a penny.

In the quarter under review, the company posted GAAP earnings of 3 cents against the prior-year quarter’s GAAP loss of a penny.

Total Sales

Net sales totaled $320.3 million, narrowly missing the Zacks Consensus Estimate of $321 million by 0.2%. However, the top line witnessed a decline of 15.4% from the year-ago quarter’s $378.7 million.

Operational Update

Hexcel's gross margin for the second quarter was 19.3% compared to 14.5% in the prior-year period, reflecting a step up in carbon fiber production and sales resulting in a strong margin mix.

Selling, general and administrative, and R&T expenses for the second quarter of 2021 rose 20% year over year.

The company’s adjusted operating income amounted to $19.3 million in the quarter compared with $19.5 million in the year-ago period.

Hexcel Corporation Price, Consensus and EPS Surprise

Hexcel Corporation price-consensus-eps-surprise-chart | Hexcel Corporation Quote

Quarterly Performance

Commercial Aerospace: Net sales were down 24.6% year over year to $153.7 million. Lower sales across all major programs, resulted in this unit’s poor top-line performance.

Space and Defense: Net sales dropped 1.4% year over year to $106.9 million on account of temporary pandemic-induced disruptions within select space and defense platforms.

Industrial: Net sales declined 10.1% year over year to $59.7 million, primarily due to lower wind energy sales.

Financial Details

As of Jun 30, 2021, cash and cash equivalents were $115.3 million compared with $103.3 million as of Dec 31, 2020.

Long-term debt totaled $904.5 million as of Jun 30, 2021, down from $925.5 million as of 2020-end.

At the end of second-quarter 2021, cash generated from operating activities was $38.9 million compared with $73.6 million in the prior year.

Hexcel’s adjusted free cash outflow at the end of second-quarter 2021 was $29.7 million compared with $33.2 million at the end of the prior-year period.

2021 Guidance

The company continues to withhold its financial guidance due to the market uncertainties arising from the global 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.

A Recent Defense Release

Lockheed Martin Corp. LMT reported second-quarter 2021 adjusted earnings of $7.13 per share, which surpassed the Zacks Consensus Estimate of $6.51 by 9.5%.

Upcoming Q2 Defense Releases

Boeing BA will release its results on Jul 28.

General Dynamics GD will release its results on Jul 28.

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