It has been about a month since the last earnings report for Hexcel (HXL). Shares have added about 10.9% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Hexcel due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Hexcel's Q4 Earnings Beat Estimates, Revenues Increase Y/Y
Hexcel Corporation reported fourth-quarter 2025 adjusted earnings of 52 cents per share, which came in line with the year-ago quarter’s figure. However, the bottom line topped the Zacks Consensus Estimate of 50 cents by 4%.
The company reported GAAP earnings of 60 cents per share, which improved a massive 757.1% from the year-ago quarter’s figure of 7 cents.
For 2025, HXL reported adjusted earnings of $1.76 per share compared with $2.03 in 2024, reflecting a year-over-year decrease of 13.3%. The year-over-year bottom-line decline can be attributed to lower net sales and operating income.
HXL’s Total Sales
In the fourth quarter, the company’s net sales totaled $491.3 million, which beat the Zacks Consensus Estimate of $478 million by 2.7%. The top line also rose 3.7% from the year-ago quarter’s reported sales of $473.8 million.
For 2025, the company recorded total sales of $1.89 billion compared with $1.90 billion in 2024, highlighting a year-over-year decrease of 0.5%. The year-over-year decline can be attributed to lower sales from the Commercial Aerospace market.
Hexcel’s Operational Update
Hexcel's gross margin in the fourth quarter was 24.6%, which contracted 40 basis points from the prior-year quarter.
Selling, general and administrative (SG&A) expenses decreased 13.2% year over year to $41.6 million in the fourth quarter. Research and technology expenses for the fourth quarter of 2025 rose 5.9% year over year to $14.3 million.
HXL’s adjusted operating income was $65.1 million in the quarter compared with $57.1 million in the year-ago period.
HXL’s Contribution From Different Markets
Commercial Aerospace: Net sales increased 7.6% year over year to $299.5 million, driven by strong growth in Airbus A320neo, Boeing 787 and 737 MAX sales.
Defense, Space & Other: Net sales fell 1.9% year over year to $191.8 million. This year-over-year decline was due to the divestment of the Austrian-based industrial business.
HXL’s Financial Details
As of Dec. 31, 2025, Hexcel’s cash and cash equivalents were $71 million compared with $125.4 million as of Dec. 31, 2024.
The company’s long-term debt totaled $993 million as of Dec. 31, 2025, up from $700.6 million as of 2024-end.
During 2025, HXL’s cash provided by operating activities was $230.5 million compared with $289.9 million in the year-ago period.
Hexcel’s adjusted free cash flow as of Dec. 31, 2025 was $157.2 million compared with adjusted free cash flow of $202.9 million in the year-ago period.
Hexcel’s 2026 Guidance
Hexcel expects to generate sales in the range of $2-$2.1 billion. The Zacks Consensus Estimate is pegged at $2.07 billion, which is above the midpoint of the company's guided range.
HXL expects its adjusted earnings per share in the range of $2.10-$2.30. The Zacks Consensus Estimate stands at $2.29, which is at the higher end of the company’s guided range.
Hexcel expects to generate free cash flow of greater than $195 million in 2026. It also expects capital expenditure to be less than $100 million.
How Have Estimates Been Moving Since Then?
Since the earnings release, investors have witnessed a flat trend in fresh estimates.
VGM Scores
Currently, Hexcel has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Hexcel has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Hexcel is part of the Zacks Aerospace - Defense Equipment industry. Over the past month, Teledyne Technologies (TDY), a stock from the same industry, has gained 8.6%. The company reported its results for the quarter ended December 2025 more than a month ago.
Teledyne reported revenues of $1.61 billion in the last reported quarter, representing a year-over-year change of +7.3%. EPS of $6.30 for the same period compares with $5.52 a year ago.
Teledyne is expected to post earnings of $5.54 per share for the current quarter, representing a year-over-year change of +11.9%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
Teledyne has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of D.
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Hexcel Corporation (HXL): Free Stock Analysis Report Teledyne Technologies Incorporated (TDY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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