Hexcel (HXL) Q1 2026 Earnings Call Transcript

Motley Fool Transcribing, The Motley Fool

Thu, April 23, 2026 astatine 10:02 AM CDT 33 min read

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Thursday, April 23, 2026 astatine 9:30 a.m. ET

• Chief Executive Officer — Thomas C. Gentile

• Interim Chief Financial Officer — Michael Lenz

• Operator

Thomas C. Gentile: Hello, everyone, and convey you for joining america contiguous for Hexcel Corporation's archetypal 4th 2026 net call. Our archetypal 4th results were successful enactment with our expectations successful presumption of an improving commercialized market, higher accumulation levels, and transmission inventory levels normalizing pursuing the destocking we experienced successful 2025. The 4th reflects beardown execution crossed the concern successful a precise dynamic environment, which is creating the operating leverage we predicted arsenic accumulation rates proceed to increase. Also, results for the archetypal 4th further show the semipermanent worth Hexcel brings to our customers arsenic a planetary person successful the improvement and manufacturing of precocious lightweight worldly solutions.

Our marketplace presumption benefits from our heavy method expertise, vertical integration astatine scale, and long-standing lawsuit relationships. With a uniquely wide portfolio of lightweight composite solutions, Hexcel is good positioned for returning to maturation arsenic commercialized aerospace accumulation recovers backmost to pre-pandemic levels and higher. Before turning to our archetypal 4th results successful much detail, I privation to concisely code the situation with the existent concern successful the Middle East. We are monitoring developments intimately and stay successful regular interaction with our customers and suppliers arsenic the concern evolves. Hexcel perpetually maintains a absorption connected taking actions to support our concern from near-term outgo volatility.

While immoderate of the inputs to our products are petroleum-based, astir of what we bargain is nether semipermanent contracts. We besides hedge propylene, a petroleum derivative, for 8 quarters. These mechanisms mitigate overmuch of the near-term interaction from higher lipid prices for feedstock, energy, and logistics costs arsenic overmuch arsenic possible. Our absorption is connected managing near-term interaction and maintaining flexibility successful our operations on with a disciplined attack to managing the business. Jet substance is 1 of the largest operating costs for airlines, which reinforces the value of ratio and lightweighting. Recent Consumer Price Index information shows that prices for airfare person risen astir 15% year-over-year arsenic airlines grapple with higher substance costs.

Newer craft present improved substance efficiency, which successful a higher-price substance situation makes lightweighting adjacent much critical. This renewed accent connected substance ratio straight benefits Hexcel. Turning to our archetypal 4th results, Hexcel achieved income of $502 million, a 10% summation compared to the aforesaid play past year. Adjusted net per stock were $0.59. Rising commercialized aerospace request drove earnings, which enhanced our operating leverage arsenic we turn backmost into our existing capacity. Gross margins besides improved compared to past year. These results bespeak improved capableness utilization and beardown operating show crossed our operations. In our Commercial Aerospace segment, income were $334 cardinal successful the archetypal quarter, an 18.8% summation implicit the aforesaid play successful 2025.