Hexcel Corporation, a leading global advanced composites manufacturer, has reported a significant increase in sales for the first quarter of fiscal 2023, driven by strong performance in its commercial aerospace unit.
According to the company’s financial report, Hexcel’s Q1 FY23 sales were $457.7 million, up 17.2% compared to $390.6 million in the same quarter of the previous year. The company’s GAAP diluted earnings per share also saw a substantial increase from the same quarter in the previous year, with Q1 FY23’s earnings per share at $0.50, compared to $0.21 in Q1 FY22.
Hexcel’s commercial aerospace unit was the primary growth driver in Q1 FY23, accounting for 62% of year-to-date sales. The unit’s sales reached $284.5 million, a 30% increase year-over-year, with the Airbus A350 and A320neo programs contributing significantly to the growth. Sales for other commercial aerospace, which includes business jets, also increased by 23.5% YoY due to expanding demand.
Hexcel’s space and defense unit also reported an increase in sales, accounting for 28% of year-to-date sales in Q1 FY23, with sales of $126.2 million, up 6.8% compared to Q1 FY22. The growth was driven by expansion across a range of platforms globally.
However, Hexcel’s industrial sales, which accounted for 10% of year-to-date sales, decreased by 12.1% compared to Q1 FY22, due to lower wind energy sales that were partially offset by sales growth in recreation, automotive, and other industrial markets.
Overall, Hexcel’s gross margin for Q1 FY23 was 27.9%, compared to 22.2% in Q1 FY22, driven by strong production volume leverage, a favorable sales mix, favourable absorption, and a beneficial foreign exchange impact. Hexcel’s adjusted operating income in Q1 FY23 was $63.0 million, or 13.8% of sales, compared to $31.1 million, or 8% of sales in 2022, reflecting the favourable impact of exchange rates on operating income as a percentage of sales.
Hexcel’s 2023 guidance remains unchanged, with sales projected to reach $1.725 billion to $1.825 billion and adjusted diluted earnings per share of $1.70 to $1.90.
According to Hexcel’s Chairman, CEO, and President Nick Stanage, the company’s relentless focus on execution and growing demand drove an 18% increase in sales, and the company delivered adjusted operating income that was more than double the same period last year. Hexcel is well-positioned to benefit from the multi-year production ramps its aerospace customers have announced, as well as growth in other markets, all of which will lead to significant cash generation and expanding shareholder value.
Hexcel Corporation’s strong Q1 sales performance indicates the company’s strategic focus on its key markets, operational efficiency, and a favourable business environment. The positive results provide an optimistic outlook for the company’s future performance and its ability to generate value for shareholders.