Hexcel Corporation (NYSE: HXL) has released its fourth quarter and full-year 2024 results, showcasing a year of steady growth and operational resilience despite ongoing challenges in the aerospace and industrial sectors. The company reported net sales of $474 million for the fourth quarter and adjusted diluted earnings per share (EPS) of $0.52, underscoring a robust year with significant advancements in its key markets.
Strong 2024 Financial Performance
Hexcel achieved a 6% year-over-year increase in sales for 2024, driven by a 12% growth in its commercial aerospace segment. Adjusted diluted EPS rose by 12% to $2.03 for the year, reflecting the company’s operational leverage and strategic focus on high-demand markets. Free cash flow generation reached $203 million, aligning with the company’s guidance for the year.
Chairman, CEO, and President Tom Gentile expressed confidence in Hexcel’s trajectory, stating, “Our adjusted EPS of $2.03 increased 12%, highlighting the inherent operating leverage opportunity within the business as production rates continue to recover from the pandemic.” He added that the company’s multi-year cash generation potential remains strong, with plans to drive growth and return Results cash to shareholders.
2025 Outlook Results
Hexcel has provided guidance for 2025, forecasting:
- Sales between $1.95 billion and $2.05 billion.
- Adjusted diluted EPS of $2.05 to $2.25.
- Free cash flow exceeding $220 million.
- Capital expenditures below $100 million.
- An effective tax rate of 21%.
The company expects approximately 10% year-over-year growth in its commercial aerospace business, despite persistent supply chain challenges in the industry. Results Hexcel aims to leverage its strong cash position to support both organic and inorganic growth, with a focus on expanding its presence in high-demand markets.
Key Priorities for 2025
Hexcel has outlined three core priorities for 2025:
- Operational Excellence: The company aims to meet increasing production rates for its customers while improving operational efficiencies and productivity.
- Innovation: Hexcel is focused on enhancing its lightweight materials to secure positions on next-generation aircraft. Its advanced composite materials are designed to enable stronger, lighter products that support higher manufacturing throughput for customers.
- Growth: Growth is expected to stem from increased adoption of lightweight composite materials, production rate increases to meet backlog demand, and strategic capital deployment for potential acquisitions.
Hexcel Announces Q4 and Full-Year 2024 Financial Results
Market Performance Overview
Commercial Aerospace
Sales in the commercial aerospace segment grew by 4.0% in the fourth quarter of 2024 to $278.3 million, with a constant currency growth rate of 4.6%. Key Results contributors included modest growth in Airbus A320neo and Boeing 787 programs. However, sales of the Boeing 737 MAX declined year-over-year, offset by strength in regional jets. For the full year, commercial aerospace sales reached $1.19 billion, an 11.8% increase compared to 2023. Growth was led by widebody aircraft such as the Boeing 787 and Airbus A350, along with the Airbus A320neo program.
Space & Defense
The space and defense segment reported fourth-quarter sales of $163.3 million, a 7.2% increase year-over-year (7.6% in constant currency). Growth was driven by strong demand for military platforms like the Sikorsky CH-53K and Lockheed F-35, as well as strength in space programs both domestically and internationally. For the full year, sales in this segment grew by 4.5% to $569.5 million, supported by classified programs and military helicopter demand.
Industrial
Industrial sales for the fourth quarter were $32.2 million, representing a 14.6% year-over-year decline (14.8% in constant currency). Results This decrease was attributed to declines across most sub-markets, with the exception of recreation. For the full year, industrial sales dropped by 20.9% to $139.3 million, reflecting broader challenges in the sector.
Consolidated Operations and Profitability
Hexcel’s gross margin improved to 25.0% in the fourth quarter of 2024, compared to 22.5% in the same period in 2023. Adjusted operating income for the quarter rose to $57.1 million, or 12.1% of sales, from $49.1 million (10.7% of sales) in the prior year. Full-year gross margin increased to 24.7% from 24.2% in 2023, benefiting from higher sales volume leverage.
Selling, general, and administrative (SG&A) expenses as a percentage of sales were 10.1% for the fourth quarter, compared to 9.2% in 2023. Research and technology (R&T) expenses rose slightly to 2.8% of net sales for the quarter and 3.0% for the full year.
Hexcel also recorded other operating expenses related to the announced potential divestiture of its Neumarkt, Austria plant, which primarily serves industrial markets. Results Restructuring costs and foreign exchange impacts also influenced overall results.
Cash Flow and Shareholder Returns
Net cash provided by operating activities increased to $289.9 million in 2024, compared to $257.1 million in 2023. Capital expenditures for the year were $87.0 million, down from $108.2 million in 2023. Free cash flow improved to $202.9 million in 2024, up from $148.9 million in the prior year.
Hexcel repurchased $252.2 million of its common stock during 2024, with $234.9 million remaining under its share repurchase program as of year-end. The company announced a 13% increase in its quarterly dividend to $0.17 per share, payable on February 14, 2025.
Hexcel Corporation demonstrated robust growth and operational efficiency inj-b-hunt-reports-q4-full-year-2024/, driven by strong performance in its commercial aerospace and space and defense segments. With a positive outlook for 2025 and a focus on innovation, operational excellence, and strategic growth, the company is well-positioned to capitalize on increasing demand for advanced composite materials across its markets. Hexcel’s commitment to shareholder returns, coupled with its focus on sustainability and innovation, underscores its position as a leader in the lightweight materials industry.