Hexcel (HXL) Q1 2026 earnings summary

Executive summary

• Q1 2026 sales reached $502 million, up 9.9% year-over-year, driven by strong commercial aerospace demand and normalized inventory levels after 2025 destocking.

• Adjusted diluted EPS rose 59.5% to $0.59, with operating income up 30.3% and net income up 28.7% year-over-year.

• Commercial aerospace drove growth, offsetting a decline in defense, space, and other sales due to divestitures.

• Guidance for 2026 remains unchanged, with confidence in growth despite geopolitical and supply chain risks.

• Leading provider of aerospace composites with 19 manufacturing plants and 5,563 employees as of December 31, 2025.

Financial highlights

• Q1 2026 sales were $502 million, up 10% year-over-year; commercial aerospace accounted for $334 million.

• Adjusted EPS was $0.59; adjusted operating income was $68 million (13.5% of sales), up from $45 million (9.9%) last year.

• Gross margin improved to 26.9% from 22.4% year-over-year, aided by volume, mix, and price realization.

• Adjusted EBITDA rose 26% to $107 million; net cash from operations was $90 million, compared to a $29 million use last year.

• Free cash flow usage was $6.2 million, a significant improvement from $55 million used in Q1 2025.

Outlook and guidance

• Full-year 2026 guidance maintained: sales of $2.0–$2.1 billion, adjusted EPS of $2.10–$2.30, and free cash flow above $195 million.

• Commercial aerospace volumes expected to remain at the low end of prior guidance for A320, with upside for A350 and 737 MAX.

• Defense segment expected to benefit from increased missile orders and defense spending in the second half of 2026.

• Capital expenditures for 2026 expected below $100 million; effective tax rate projected at 20%.

• Multi-year growth supported by strong OEM backlogs and increasing production rates.