US' Hexcel sees 2.7% H1 sales dip, reaffirms 2025 outlook

The gross margin fell to 22.6 per cent from 25.2 per cent, primarily due to lower capacity utilisation, inventory reduction initiatives, and tariff headwinds.

Commercial Aerospace, which accounted for 61 per cent of H1 sales, recorded revenue of $573.2 million, down 7.5 per cent (7.7 per cent in constant currency). The decline was primarily driven by reduced deliveries across major programmes, including the Airbus A350 and Boeing 787, Hexcel said in a press release.

Defense, Space & Other contributed $373.2 million, up 5.8 per cent (5.2 per cent in constant currency), reflecting robust demand in military helicopters, international fighter jets, and space-related programmes.

The adjusted operating income in H1 declined 21.1 per cent to $99.5 million, or 10.5 per cent of sales. The adjusted diluted earnings per share (EPS) for H1 stood at $0.87, and free cash flow was negative $46.6 million, primarily due to increased working capital requirements and capital expenditures of $41.4 million.

Meanwhile, in the second quarter (Q2) of 2025, Hexcel posted net sales of $489.9 million, a 2.1 per cent decline and decline of 2.9 per cent in constant currency. The gross margin declined to 22.8 per cent from 25.3 per cent, while adjusted operating income fell to $54.2 million or 11.1 per cent of sales.

Commercial Aerospace in Q2 saw drop in sales of 8.6 per cent YoY to $293.1 million. In contrast, Defense, Space & Other revenue grew 9.5 per cent to $196.8 million, driven by strong momentum in programmes like the Sikorsky CH-53K, international fighter jets, and space platforms.

The adjusted diluted EPS was $0.5. GAAP diluted EPS fell sharply to $0.17, mainly due to a $24.2 million restructuring charge related to the closure of the Welkenraedt, Belgium facility.

“Hexcel delivered sales and adjusted EPS in line with expectations for the second quarter of 2025, based on modest sequential growth in three of our four major commercial aerospace programs, with the exception being softness in the Airbus A350 as expected and previously communicated due to production rate decreases announced by Airbus and destocking of excess inventory in the supply chain,” said Tom Gentile, chairman, chief executive officer (CEO) and president at Hexcel.

“Hexcel also participated in the Paris Air Show last month where we reinforced existing relationships, announced some new relationships, and highlighted recent advances with our innovative technology. We forecast a compelling growth trajectory for the business as production rates on all commercial and military programmes continue to increase,” added Gentile.

For full-year 2025, Hexcel expects net sales to range between $1.88 billion and $1.95 billion, with adjusted diluted EPS projected between $1.85 and $2.05. Free cash flow is anticipated to be approximately $190 million, while capital expenditures are expected to remain below $90 million. The effective tax rate is estimated at around 21 per cent, excluding any discrete tax items, added the release.

ALCHEMPro News Desk (SG)