Hexcel Corp. (HXL) Reports In-Line Q4 EPS, Revenues Miss

Hexcel Corp. (NYSE: HXL) reported Q4 EPS of ($0.18), in-line with the analyst estimate of ($0.18). Revenue for the quarter came in at $295.8 million versus the consensus estimate of $298.72 million.

• Q4 2020 GAAP diluted EPS was ($0.23) with adjusted diluted EPS of ($0.18), compared to Q4 2019 GAAP diluted EPS and adjusted diluted EPS of $0.86.
• Q4 2020 Sales were $295.8 million, compared to $564.3 million in Q4 2019.
• FY 2020 GAAP diluted EPS was $0.38 vs FY 2019 at $3.57. FY 2020 adjusted diluted EPS was $0.25 vs FY 2019 at $3.54.
• FY 2020 Sales were $1,502 million, a decrease of 36% compared to FY 2019.
• Free Cash Flow of $214 million in FY 2020 with $104 million in the fourth quarter.
• Liquidity remains strong, at $875 million, with cash on hand of $103 million and an undrawn revolver balance of $772 million, at December 31, 2020.

Chairman, CEO and President Nick Stanage said, “Fourth quarter revenue of $296 million was in line with our expectations and consistent with our previous commentary that the third and fourth quarters of 2020, along with the first quarter of 2021, have been and are expected to be our most challenging quarters during this pandemic driven market downturn. Adjusted EPS for the quarter was negative 18 cents, reflecting stronger margin performance than the third quarter of 2020, although sales mix and reduced overhead absorption continue to be significant headwinds. Revenue for the full year was $1,502 million, down 36% in constant currency compared to 2019, with adjusted diluted EPS for the year of $0.25. Our cash management continued to be strong with Hexcel delivering $214 million of free cash flow for 2020, ensuring that our liquidity position remains robust.”

Mr. Stanage continued: “Our results clearly reflect an unusual and tumultuous year for our customers, our suppliers, and our Hexcel employees who have remained laser-focused on managing through the challenges at hand. The Hexcel team has responded quickly and worked safely and efficiently through significant uncertainty. Employees have been challenged in ways we never imagined, yet their commitment to excellence and to our customers has never wavered with many relationships actually being strengthened through innovative ways of working.”

“We continue to forecast stabilizing demand as we move into the second quarter of 2021, with the inventory de-stocking process expected to be largely winding down and the potential for some narrowbody build rate recovery as we progress into the second half of the year. However, there is no room for complacency during this pandemic. A quick and successful rollout of the vaccines is crucial to a significant increase in airline passenger traffic, which will ultimately be the driver of demand for new, composite-rich aircraft.”

In conclusion, Mr. Stanage said: “As we enter 2021, we will continue to tightly manage cash and costs, and ensure that we deliver our performance targets. The overall long-term demand for efficient aircraft and our advanced composites technology remains robust, and the potential for a significant upturn in 2022 and beyond continues to look positive. The actions being taken, coupled with our industry-leading technology and strong customer relationships, will ensure that Hexcel emerges from this pandemic stronger than ever, with a more efficient cost base, strategically positioned for growth to support the future of aerodynamics and sustainability in aerospace and industrial markets.”

For earnings history and earnings-related data on Hexcel Corp. (HXL) click here.

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