Hexcel Releases 2018 Second Quarter Results

Hexcel Corporation reported second quarter 2018 results including net sales of $547.5 million and adjusted diluted EPS of $0.75. Second Quarter 2018 Results Sales of $547.5 million in the second quarter of 2018 were 11.4% higher (10.3% higher in constant currency) than the second quarter of 2017. Commercial Aerospace •Commercial Aerospace sales of $383.8 million increased 10.0% (9.7% higher in constant currency) for the quarter compared to the second quarter of 2017. •Sales to “Other Commercial Aerospace,” which include regional and business aircraft, were up over 40% for the second quarter of 2018 as compared to soft 2017 results. Space & Defense •Space & Defense sales of $91.7 million increased 4.4% (3.1% in constant currency) for the quarter as compared to the second quarter of 2017. Industrial •Total Industrial sales of $72.0 million in the second quarter were up 32.1% (24.8% in constant currency) compared to the second quarter of 2017. •Wind energy sales (the largest submarket in Industrial) are experiencing a period of substantial growth relative to lower sales last year as new generation composite blades are adopted. Consolidated Operations •Gross margin for the second quarter was 26.4% compared to 28.5% in the second quarter of 2017. Similar with the first quarter of 2018, gross margin for the second quarter included an increase in depreciation of approximately $5 million compared to the second quarter of 2017. As expected and previously highlighted, the Company experienced headwinds related to the startup and qualification of the new precursor (PAN) and carbon fiber plant in France. •Selling, general and administrative expenses for the second quarter were lower than the prior year period with the Company maintaining tight cost controls while, at the same time, growing revenue. R&T costs were up around 5% in constant currency as compared to the second quarter of 2017. •Adjusted operating income in the second quarter of 2018 was $96.5 million, or 17.6% of sales, compared to $89.7 million, or 18.3% of sales, in 2017. The impact of exchange rates in the second quarter of 2018 was effectively neutral compared to 2017.