Why Hexcel (HXL) Shares Are Falling Today

What Happened?

Shares of aerospace and defense company Hexcel (NYSE:HXL) fell 3.2% in the afternoon session after the company reported second-quarter 2025 financial results that showed year-over-year declines in revenue and profit. 

The aerospace materials supplier's sales fell 2.1% to $490 million compared to the prior-year quarter. Adjusted earnings per share also decreased to $0.50 from $0.60. The company's profitability took a hit as gross margins contracted to 22.8% from 25.3%, which Hexcel attributed to lower production and inventory reduction efforts. Furthermore, operating income plunged by 58.2%, impacted by a $24.2 million restructuring charge related to a facility closure. Despite the yearly declines, both revenue and adjusted earnings per share did manage to beat Wall Street expectations for the quarter. The company also maintained its full-year guidance.

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What Is The Market Telling Us

Hexcel’s shares are not very volatile and have only had 3 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The biggest move we wrote about over the last year was 3 months ago when the stock dropped 9.9% on the news that the company reported weak first quarter 2025 results. Its revenue, EPS, and EBITDA missed analysts' estimates. Hexcel also cut its full-year revenue and profit forecasts in response to continued supply chain delays. A key concern was the commercial aerospace sales which dropped over 6%, hit hard by slower production on jets like the 787 and A350. That dragged overall sales down 3%, and profits dropped too, with lower volumes making it harder to cover fixed costs. Defense and space did okay, up almost 3%, but that just wasn't enough to balance out the hit in commercial. Overall, this quarter could have been better.

Hexcel is down 1.5% since the beginning of the year, and at $60.85 per share, it is trading 13.9% below its 52-week high of $70.69 from January 2025. Investors who bought $1,000 worth of Hexcel’s shares 5 years ago would now be looking at an investment worth $1,363.

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