Hexcel Corporation Reports Decline in Financial Performance for Q2 and First Half of 2025

Hexcel Corporation reported a decline in financial performance for the second quarter and first half of 2025, as detailed in its latest 10-Q filing. The company recorded net sales of $489.9 million for the second quarter, a decrease of 2.1% from $500.4 million in the same period last year. For the first six months, net sales totaled $946.4 million, down 2.7% from $972.7 million in 2024. The company's operating income also fell significantly, dropping to $30.0 million in the second quarter from $71.8 million a year earlier, and to $74.2 million from $124.7 million for the first half. This decline in profitability was attributed to lower sales volumes and increased restructuring costs related to the closure of the Welkenraedt facility in Belgium.

Hexcel's net income for the second quarter was $13.5 million, a 73% decrease from $50.0 million in the prior year, while net income for the first half was $42.4 million, down 51% from $86.5 million. The diluted net income per share also reflected this downturn, falling to $0.17 from $0.60 for the second quarter and to $0.52 from $1.03 for the first half. The company faced challenges in its Commercial Aerospace segment, where sales decreased by 8.6% in the second quarter, primarily due to declines in major aircraft programs from Airbus and Boeing.

In terms of operational developments, Hexcel has been undergoing significant restructuring, which included a $24.2 million charge in the second quarter related to the closure of its Welkenraedt facility. The company is also in the process of divesting its operations in Austria, which have been classified as held for sale. This strategic decision comes as the wind energy market has shifted away from Hexcel's glass prepreg products, leading to low sales volumes. The company reported a total debt of $827.7 million as of June 30, 2025, an increase from $700.7 million at the end of 2024, reflecting higher borrowings to support its operations.

Hexcel's cash flow from operating activities showed a negative trend, with a net cash outflow of $5.2 million for the first half of 2025, compared to a cash inflow of $37.2 million in the same period last year. The company attributed this to increased working capital requirements, particularly higher payments to accounts payable. Despite these challenges, Hexcel continues to maintain a strong liquidity position, with $77.2 million in cash and undrawn availability of $620 million under its credit facility.

Looking ahead, Hexcel remains cautious about its outlook, citing ongoing challenges in the aerospace market, including supply chain disruptions and inflationary pressures. The company is focused on navigating these issues while continuing to invest in its core business segments. Hexcel's management is evaluating the impact of recent U.S. tax legislation on its financial statements and is committed to executing its strategic initiatives, including potential acquisitions and product innovations, to drive future growth.