Hexcel's (NYSE:HXL) Q4 CY2025 Sales Top Estimates, Stock Soars

Aerospace and defense company Hexcel (NYSE:HXL) reported Q4 CY2025 results exceeding the market’s revenue expectations, with sales up 3.7% year on year to $491.3 million. On the other hand, the company’s full-year revenue guidance of $2.05 billion at the midpoint came in 0.7% below analysts’ estimates. Its non-GAAP profit of $0.52 per share was 5.2% above analysts’ consensus estimates.

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Chairman, CEO and President Tom Gentile said, “Although 2025 was another challenging year for commercial aircraft production, we began to see positive trends in the fourth quarter that suggest a stronger 2026. Earlier this past year, our commercial aerospace OEM customers delayed aircraft production rate ramps, particularly on the Airbus A350, Hexcel’s largest program, due to industry-wide supply chain disruptions leading to channel destocking that weighed on our 2025 sales and margins. Recent trends of rising commercial aircraft build rates are encouraging as are the global trends of increasing defense and space spending. We closed 2025 on a strong note with a solid fourth quarter and particularly favorable order trends in December as destocking abates, which reinforces our view that the commercial aerospace recovery is accelerating.”

Company Overview

Founded shortly after World War II by a group of engineers from UC Berkley, Hexcel (NYSE:HXL) manufactures lightweight composite materials primarily for the aerospace and defense sectors.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Unfortunately, Hexcel’s 4.7% annualized revenue growth over the last five years was tepid. This was below our standard for the industrials sector and is a tough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Hexcel’s recent performance shows its demand has slowed as its annualized revenue growth of 2.9% over the last two years was below its five-year trend.

We can better understand the company’s revenue dynamics by analyzing its most important segments, Commercial aerospace and Space & defense, which are 61% and 39% of revenue. Over the last two years, Hexcel’s Commercial aerospace revenue (customers like Airbus, Boeing) averaged 4.2% year-on-year growth while its Space & defense revenue (government customers) averaged 13% growth.

This quarter, Hexcel reported modest year-on-year revenue growth of 3.7% but beat Wall Street’s estimates by 2.2%.

Looking ahead, sell-side analysts expect revenue to grow 9.5% over the next 12 months, an improvement versus the last two years. This projection is commendable and suggests its newer products and services will catalyze better top-line performance.

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Operating Margin

Hexcel has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 9.4%, higher than the broader industrials sector.

Looking at the trend in its profitability, Hexcel’s operating margin rose by 5.2 percentage points over the last five years, as its sales growth gave it operating leverage.

This quarter, Hexcel generated an operating margin profit margin of 12.5%, up 10.6 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Hexcel’s EPS grew at an astounding 47.7% compounded annual growth rate over the last five years, higher than its 4.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

We can take a deeper look into Hexcel’s earnings to better understand the drivers of its performance. As we mentioned earlier, Hexcel’s operating margin expanded by 5.2 percentage points over the last five years. On top of that, its share count shrank by 7.4%. These are positive signs for shareholders because improving profitability and share buybacks turbocharge EPS growth relative to revenue growth.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Hexcel, its two-year annual EPS declines of 1.4% mark a reversal from its (seemingly) healthy five-year trend. We hope Hexcel can return to earnings growth in the future.

In Q4, Hexcel reported adjusted EPS of $0.52, in line with the same quarter last year. This print beat analysts’ estimates by 5.2%. Over the next 12 months, Wall Street expects Hexcel’s full-year EPS of $1.76 to grow 30.8%.

Key Takeaways from Hexcel’s Q4 Results

We were impressed by how significantly Hexcel blew past analysts’ Commercial aerospace revenue expectations this quarter. We were also glad its Space & defense revenue topped Wall Street’s estimates. On the other hand, its full-year EPS guidance missed and its full-year revenue guidance fell slightly short of Wall Street’s estimates. Overall, this was a weaker quarter. The stock traded up 8.9% to $87.31 immediately following the results.

So do we think Hexcel is an attractive buy at the current price? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).