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American firm Hexcel Corporation's sales at $472.3 mn in Q1 FY24

24 Apr '24
2 min read
American firm Hexcel Corporation's sales at $472.3 mn in Q1 FY24
Pic: Hexel Corporation

Insights

  • American company Hexcel Corporation reported sales of $472.3 million in Q1 FY24, up from $457.7 million last year, but saw gross margin drop to 25 per cent from 27.9 per cent.
  • The company's operating income fell to $54.1 million, despite gains in aerospace and defense sectors.
  • Industrial sales dropped significantly by 27.9 per cent in Q1 FY24.
US-based advanced composites manufacturer Hexcel Corporation has reported sales of $472.3 million in the first quarter of fiscal 2024 (Q1 FY24), marking a modest increase from $457.7 million in the same quarter of the previous year. Despite the growth in revenue, the company experienced a decline in gross margin, which dropped to 25 per cent from 27.9 per cent in Q1 FY23, influenced by less favourable absorption and sales mix.

Administrative costs showed a slight improvement as a percentage of sales, with selling, general and administrative, and research and technology expenses dropping to 13.6 per cent from 14.1 per cent year-over-year. However, adjusted operating income decreased to $54.1 million, or 11.5 per cent of sales, down from $63.0 million or 13.8 per cent of sales in the prior year, indicating tightening profit margins, the company said in a media release.

In sector-specific performances, commercial aerospace, which comprises 63 per cent of the year-to-date sales, reported a revenue of $299.3 million, a 5.2 per cent increase in both reported and constant currency terms, driven primarily by higher widebody sales. However, sales in other areas of commercial aerospace, such as business jets, declined by 6.3 per cent.

The space and defense sector, accounting for 30 per cent of the year-to-date sales, saw a notable increase of 10.2 per cent (10.0 per cent in constant currency) in sales, reaching $139.1 million. This growth was spearheaded by robust performances in fixed-wing aircraft programmes, along with contributions from classified programmes.

On the downside, the industrial sector, making up 7 per cent of the year-to-date sales, faced a significant downturn, with sales plummeting 27.9 per cent (28.5 per cent in constant currency) to $33.9 million. This decline was uniform across all industrial sub-markets, reflecting broader challenges in the sector.

“Our commercial aerospace market continues to build momentum with our first quarter FY24 sales growing sequentially from the fourth quarter of FY23, including growth in both widebody and narrowbody programmes. Volume leverage across the business drove sequential margin expansion demonstrating continued strong execution on our upward trajectory. We remain committed to delivering our FY24 and our mid-term guidance as the Hexcel team focuses on growth, margin expansion and cash generation,” said chairman, CEO, and president Nick Stanage.

Fibre2Fashion News Desk (DP)

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