Stock in Focus: Hexcel Corporation (NYSE: HXL)

STAMFORD, Conn., January 20, 2020 – Shares of Hexcel Corporation (NYSE: HXL) showed the bearish trend with a lower momentum of -0.55% to $77.75. The company traded total volume of 1.035M shares as contrast to its average volume of 750.73K shares. The company has a market value of $6.69B and about 85.99M shares outstanding.

Hexcel Corporation (HXL) posted revenues of $572.50M for the quarter ended September 2019, missing the Zacks Consensus Estimate by 5.22%. This compares to year-ago revenues of $540.50M. The company has topped consensus revenue estimates two times over the last four quarters.

Cash and Other:

The tax provision was $18.20M for the third quarter of 2019, reflecting an effective tax rate of 18.4%, compared to 9.1% in 2018. The third quarter of 2018 was significantly impacted by transition adjustments related to U.S. tax reform. The third quarter of 2019 benefitted primarily from tax credits identified during the quarter of $3.00M. Excluding these benefits, the adjusted effective tax rate was 21.4% compared to 20.3% in 2018. Both periods benefited from deductions associated with share-based compensation payments. The underlying effective tax rate is expected to be 24% for the final quarter of the year.

Net cash generated from operating activities for the first nine months of 2019 was $277.30M, compared to $278.40M in the first nine months of the prior year. Capital expenditures were $162.70M for the first nine months of 2019, compared to $150.20M for the first nine months of 2018. Free cash flow was $114.60M for the first nine months of 2019, compared to $128.20M for the same period of the prior year. Free cash flow is defined as cash provided from operating activities less cash paid for capital expenditures. Working capital use YTD is $83.70M compared to a use of $64.60M 2018.

The Company used $55.70M to repurchase shares of its common stock during the third quarter of 2019 and used $66.90M for share repurchases in the first nine months of 2019. The Company has $318.0M remaining under the authorized share repurchase program.

The Company offered net profit margin of 12.70% while its gross profit margin was 27.40%. ROE was recorded as 21.60% while beta factor was 1.02. The stock, as of recent close, has shown the weekly upbeat performance of 6.64% which was maintained at 6.06% in this year.

Alton Simmons

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