Hexcel Reports 2021 First Quarter Results

Rhea-AI Summary

Hexcel Corporation (NYSE: HXL) reported Q1 2021 results with net sales of $310.3 million, a substantial 42.6% decline from $541.0 million in Q1 2020. The operating loss was $10.2 million compared to a profit of $65.7 million a year ago. Net loss reached $14.0 million, resulting in a diluted loss per share of $0.17. Commercial Aerospace sales fell 59.3% due to pandemic impacts, while Space & Defense remained stable. The company anticipates gradual recovery and expects to emerge stronger post-pandemic, aiming for $150 million in annual cost savings.

Positive

• Significant cost control measures in response to pandemic challenges.
• Projected gradual recovery in sales as supply chain destocking winds down.
• Expected growth in Commercial Aerospace sales reflecting OEM aircraft build rates later in 2021.

Negative

• Substantial drop in net sales by 42.6% year-over-year.
• Operating loss of $10.2 million compared to prior year profit.
• Continued low sales in Commercial Aerospace, down 59.3%.

Hexcel Corporation (NYSE: HXL):

Summary of Results from Operations
	Quarters Ended
	March 31,
(In millions, except per share data)		2021					2020				% Change
Net Sales	$		310.3			$		541.0				(42.6	)%
Net sales change in constant currency												(43.5	)%
Operating (loss) income			(10.2	)				65.7				(115.5	)%
Net (loss) income			(14.0	)				42.4				(133.0	)%
Diluted net (loss) income per common share	$		(0.17	)		$		0.50				(133.4	)%
Non-GAAP measures for year-over-year comparison (Table C)
Adjusted Operating income	$		1.9			$		80.4				(97.6	)%
As a % of sales			0.6	%				14.9	%
Adjusted Net (loss) income (Table C)			(8.4	)				53.8				(115.6	)%
Adjusted diluted net income per share	$		(0.10	)		$		0.64				(115.6	)%

Hexcel Corporation (NYSE: HXL) today reported first quarter 2021 results including net sales of $310 million and adjusted diluted EPS of $(0.10) per share.

Chairman, CEO and President Nick Stanage said, “First quarter results were in line with our expectations and reflect a strong focus on cost controls in light of the pandemic-related economic headwinds we face, including the impact of continued supply chain destocking. This first quarter, along with Q3 and Q4 2020, are projected to be the low point of the current pandemic-driven demand cycle, and we now expect destocking to wind down as we move through the second quarter and to be mostly behind us as we enter the second half of the year. At that point, Commercial Aerospace sales should start to grow steadily, more closely reflecting OEM aircraft build rates. We expect a gradual step up in sales each quarter as 2021 progresses, followed by an extended period of growth starting in 2022.”

Mr. Stanage continued, “We believe a steady yet slow recovery is developing as the world emerges from the pandemic and regains its confidence in traveling once again. As it does, Hexcel is well positioned to support the sizable OEM aircraft backlog with our innovative, lightweight advanced composites technology that drives fuel efficiency, reduces emissions, and improves performance. We also previously communicated our target to reduce overhead costs on an annual basis by $150 million by mid-2021 and I’m pleased to report a significant portion of those savings have been achieved and are reflected in our first quarter results. Hexcel has never been more focused on its Customers, on Operational Excellence, and on Innovation. We expect to emerge from these challenges as a leaner and stronger company, even better positioned to deliver strong growth and increasing shareholder returns.”

Markets

Sales in the first quarter of 2021 were $310.3 million compared to $541.0 million in the first quarter of 2020.

Commercial Aerospace

• Commercial Aerospace sales of $147.6 million decreased 59.3% (59.7% in constant currency) for the quarter compared to the first quarter of 2020. Sales were down significantly across all major platforms reflecting pandemic-induced build rate reductions by the aircraft OEMs and continued supply chain destocking. Boeing 737 MAX sales continue at a low level.
• Sales to “Other Commercial Aerospace,” which include regional and business aircraft, decreased 48.0% in the first quarter of 2021 as compared to 2020, as the global pandemic negatively impacted demand across this market sector, particularly business jets.

Space & Defense

• Space & Defense sales of $111.7 million were unchanged compared to the first quarter of 2020 (decrease of 1.0% in constant currency). Strength in rotorcraft, including the CH-53K, as well as the F-35 joint strike fighter was offset by the collective impact of a softer quarter for a number of smaller U.S. defense and space programs.

Industrial

• Total Industrial sales of $51.0 million in the first quarter were down 23.3% (27.1% in constant currency) compared to the first quarter of 2020. Lower wind energy sales drove the decrease, partially offset by stronger automotive sales.
• Wind energy sales (the largest submarket in Industrial) experienced a decline of 42.5% in constant currency compared to the first quarter of 2020. The decrease was due to general lower demand and the cessation of sales in North America following a previously reported customer demand shift.

Consolidated Operations

Gross margin for th

FAQ

What were Hexcel's Q1 2021 net sales?

Hexcel reported net sales of $310.3 million in Q1 2021.

How much did Hexcel's net sales decline in Q1 2021?

Net sales declined by 42.6% compared to $541.0 million in Q1 2020.

What was Hexcel's diluted loss per share for Q1 2021?

Hexcel's diluted loss per share for Q1 2021 was $0.17.

What are Hexcel's expectations for recovery in 2021?

Hexcel anticipates a gradual recovery in sales as destocking winds down throughout the year.

How much cost savings does Hexcel aim to achieve by mid-2021?

Hexcel aims to achieve $150 million in annual cost savings by mid-2021.