Hexcel ups dividend after Q1 sales increase
Hexcel Corporation, the US materials technology specialist whose European R & D centre is in the Cambridge UK innovation cluster, has hoisted net sales by 5.5 per cent to $497.7 million for the first quarter of 2016.
Its Duxford base is one of the brains behind the Wall Street company’s increased worldwide influence on a number of industries. It has millions of dollars worth of engineering on each of the new Airbus planes, for example.
Hexcel has also announced a 10 per cent increase in the Q1 dividend to $0.11 per share.
Chairman, CEO and president Nick Stanage said: “This was a great start to the year for Hexcel, with solid execution leading to strong results. For the quarter, our adjusted diluted EPS of $0.59 was just above last year’s $0.58, on a constant currency sales increase of 5.1 per cent.
“Even with the start-up of several new production lines for additional capacity to achieve our forecast growth, we delivered a solid gross margin of 28.7 per cent this quarter, as compared to the record 30.1 per cent last year when we benefited from a favourable product mix.”
Commercial aerospace sales, which account for 70 per cent of total sales, were 8.5 per cent higher than last year in constant currency.
Sales growth was led by the A350 XWB and the A320neo. Space & Defence sales account for 16 per cent of total sales and were 10.7 per cent lower in constant currency than last year.
Industrial sales were 10.6 per cent higher in constant currency than last year, led by the acquisition of Formax.
Stanage added a caveat regarding space & defence sales. He said: “Our guidance was for full year 2016 space & defence sales to be stable compared with last year.
“While our first quarter sales were in line with our expectations, our current outlook for the rest of 2016 is that it will be challenging to achieve our full year guidance for space & defence sales. However additional commercial aerospace and industrial sales are expected to offset any shortfall allowing us to maintain our full year sales guidance.
“With the strong start to the year, we remain confident in achieving our 2016 guidance of adjusted diluted EPS of $2.44 to $2.56 on sales of $1.97 to $2.07 billion.
“The company’s focus in 2016 remains driving manufacturing throughput, capacity expansion and superior execution to prepare for the substantial production ramp up of new programs, led by commercial aerospace.”
Referencing the dividend spike, Stanage said: “This reflects confidence in our ability to grow the business and consistently deliver strong operating performance.
“Our robust outlook and strong balance sheet enables us to increase dividends to our stockholders while we continue to invest in capacity to support our growth.”