Hexcel third-quarter sales rise 8.8% to $496.4 million as aerospace grows

Hexcel Corporation (HXL) said Wednesday that net sales for the third quarter ended Sept. 30 rose 8.8% to $496.4 million from a year earlier.

The company said in a filing that it also raised its share repurchase authorization to $750 million and left its 2026 guidance unchanged.

Here's how the company did:

• Net sales: $496.4 million vs. $456.2 million a year earlier
• GAAP diluted EPS: $0.50 vs. $0.26 a year earlier
• Adjusted diluted EPS: $0.50 vs. $0.37 a year earlier
• Operating income: $54.8 million vs. $36.0 million a year earlier
• Net income: $38.6 million vs. $20.6 million a year earlier
• Adjusted operating income: $54.4 million vs. $44.8 million a year earlier

Adjusted operating income was 11.0% of sales, compared with 9.8% a year earlier. Adjusted, or non-GAAP, measures exclude special items, which the company describes as charges or credits that matter to understanding its operating results.

Gross margin was 23.3%, up from 21.9%, as higher volume drove operating leverage. Selling, general and administrative expenses were 9.0% of sales in both periods, and research and development expenses were 3.3%, up from 3.1%.

Sales were down from $529.3 million in the second quarter of 2026. The company said third-quarter results reflected its typical summer sales seasonality, which affected operating leverage.

Chairman, CEO and President Tom Gentile said: “Consistent with what we communicated last quarter, our third quarter financial results reflected our typical summer sales seasonality, which impacted operating leverage.”

Gentile also cited near-term cost headwinds from accelerated hiring and training to support demand the company is seeing for the fourth quarter and 2027.

Segment results

Commercial Aerospace sales were $330.3 million, up 20.5% from a year earlier, or 21.0% in constant currency. Both widebody programs, including the Airbus A350 and Boeing 787, and narrowbody programs, including the Airbus A320 and Boeing MAX, grew year over year.

Defense, Space & Other sales fell 8.7% to $166.1 million, or 8.6% in constant currency. The company said the decline primarily reflected the divestment of a non-core Austrian-based industrial business at the end of September 2025 and the closure of a non-core industrial business in Leicester, UK, earlier this year.

The company also cited temporary softness in F-35 and an international fighter program, and in launchers and rocket motors.

Here's how Hexcel's segments did during the quarter:

• Composite Materials: operating income of $61.1 million, a 14.7% operating margin, vs. $39.9 million and a 10.4% margin a year earlier
• Engineered Products: operating income of $12.7 million, an 11.8% operating margin, vs. $13.6 million and a 14.4% margin a year earlier

Nine-month results

For the first nine months, net sales were $1,527.2 million, up 8.9% from $1,402.6 million a year earlier. Operating income was $185.0 million, up 67.9% from $110.2 million.

Diluted net income per share was $1.63 for the nine months, compared with $0.78 a year earlier. Other operating expense for the period included restructuring expenses tied to the shutdown of industrial-oriented manufacturing at the Leicester, UK facility, along with non-recurring professional fees, the company said in the filing.

Cash flow and share repurchases

Net cash provided by operating activities for the nine months was $171.1 million, compared with $105.0 million a year earlier. Free cash flow, defined as operating cash flow less cash paid for capital expenditures, was $102.5 million against $49.9 million.

The company did not repurchase any shares in the third quarter. Its remaining authorization was approximately $380.6 million as of Sept. 30, and the board raised the total authorization to $750.0 million.

Gentile said: “Reflecting confidence in the strong cash generation profile of the business, the Board of Directors increased the share repurchase authorization to $750 million from $381 million.”

The company expects to return to its targeted leverage range by the end of 2026, having prioritized debt repayment after an accelerated share repurchase program it began last year.

The board also declared a quarterly dividend of $0.18 per share, payable to stockholders of record on Nov. 2, with payment on Nov. 9.

2026 guidance

The company left its 2026 guidance unchanged, as shown below.

Gentile said: “We are reaffirming our 2026 guidance and expect full year results to be within the sales and adjusted EPS ranges previously provided.”

Hexcel will host a conference call at 9:30 a.m. ET on Thursday, Oct. 22, to discuss the third-quarter results, with a webcast on its investor relations website.