Hexcel (NYSE:HXL) reported first-quarter 2026 results that management said were in line with expectations as commercial aerospace production increased and channel inventory levels continued to normalize after 2025 destocking. Chairman, CEO and President Tom Gentile said the quarter reflected “strong execution across the business in a very dynamic environment,” helping deliver the operating leverage the company has anticipated as production rates rise.
Quarterly results and commercial aerospace recovery
Hexcel posted first-quarter sales of $502 million, which Gentile said was a 10% increase versus the prior year period. Interim CFO Mike Lenz said sales rose 8.8% in constant currency. Adjusted earnings per share were $0.59.
Commercial Aerospace segment sales were $334 million in the quarter, which Gentile said was up 18.8% from the same period in 2023. Lenz, using the year-over-year comparison to 2025, said commercial aerospace sales were $333 million, up 19%, and represented about 66% of total quarterly sales. Both executives said sales increased across the major Airbus and Boeing programs, including the A350, A320, 787 and 737 MAX, with “other” commercial aerospace also up 15.6% year over year on strength in regional and business jets.
Program-rate outlook: puts and takes, guidance maintained
Gentile said Hexcel continues to see evidence that higher production rates at aircraft OEMs are “taking hold,” and management maintained its full-year guidance. In response to a question from Wells Fargo’s David Strauss about whether commercial aerospace expectations were changing, Gentile said the company was holding to its plan while noting “some puts and takes” across platforms.
- Airbus A320: Gentile said that based on public announcements about engine availability, Hexcel now expects its A320 volumes to be at the lower end of its prior guidance range (previously described as low-to-mid 700s for the year).
- Airbus A350: He said channel destocking is “largely behind us,” production is aligning more closely with Airbus build rates, and Hexcel remains confident in an outlook of 80 units in 2026, “perhaps even with some upside.”
- Boeing 737 MAX: Gentile said Hexcel is seeing “tangible evidence of progress” in the ramp. He called the first quarter Hexcel’s “best quarter on the MAX in years,” with production “around 40 aircraft per month.” He added that Hexcel’s 2026 forecast had been in the mid-400s and “it looks like Boeing will exceed that.”
- Boeing 787: Gentile said the company continues to expect 90–100 units for 2026.
When asked by TD Cowen’s Gautam Khanna to quantify shipment rates, Gentile offered rough figures, saying the A350 was “about seven, a little bit underneath seven,” the 787 was “a little bit above seven,” the A320 was “just under 60-ish,” and the MAX was “in the 40 range.” He noted Hexcel is typically four to six months ahead of OE assembly and that its estimates are based on production, not deliveries.
Lenz said the company reaffirmed 2026 guidance, including adjusted EPS of $2.10 to $2.30, and clarified to Wolfe Research’s Myles Walton that management expects a “roughly even split” of EPS between the first and second half of the year.
Defense, space and portfolio actions
Defense, Space and Other sales were $169 million in the first quarter. Gentile said the segment was impacted by the divestment of Hexcel’s Austrian facility, resulting in lower sales versus the prior year. Excluding the divestment effect, he said defense and space sales were up “low single digits,” helped by European fighter programs and U.S. and European military rotorcraft, offset by lower space volumes for launchers and rocket motors.
Lenz highlighted that year-over-year comparisons will be influenced through the third quarter due to the Austrian divestment. He also said Hexcel’s plan to cease industrial operations at its Leicester, U.K. site will create an additional year-over-year sales headwind, noting Leicester had generated “around $15 million annually.” Gentile said restructuring costs related to Leicester affected results in the quarter, while the company remains on track to transition the site from industrial applications to aerospace development.
On the outlook for defense, Jefferies’ Sheila Kahyaoglu asked when volumes could accelerate. Gentile described defense as “lumpy” and cited a pause in one space program (Vulcan) as an example of year-over-year variability. He said increased missile orders should begin to flow through more materially in the third and fourth quarter of the year.
Margins, operating leverage, and R&D spending
Management repeatedly pointed to operating leverage as commercial volume rises. Gentile said Hexcel is taking a measured approach to bringing capacity online so incremental costs stay aligned with sustained demand. He cited the company’s carbon fiber production in Salt Lake City, saying it has 14 lines and had mothballed four during most of the pandemic; one line was brought back at the end of last year and another is expected to come back this year.
Asked about margin performance, Gentile said the first quarter benefited from “strong volume performance,” some contract pricing actions, and a benefit from selling inventory built last year at lower cost. He also credited “operational discipline” and productivity initiatives.
Lenz reported adjusted operating income of $68 million, or 13.5% of sales, compared to $45 million, or 9.9% of sales, a year earlier. He also said foreign exchange became a headwind: first-quarter 2026 operating margin was negatively impacted by about 80 basis points from FX, versus a roughly 60 basis point benefit in the prior-year quarter.
On R&D, Deutsche Bank’s Scott Deuschle asked whether higher spending would continue. Lenz said overall R&D headcount was down year over year, but the quarter saw timing-related spending and some reclassification of costs from factory cost centers into R&D. Gentile added Hexcel is “stepping up R&D” to align with OEM work on next-generation aircraft, including testing new carbon fibers and resin systems and engaging with both airframe and engine OEMs.
Regarding timing for next-generation clean-sheet aircraft decisions, Gentile told RBC Capital Markets’ Ken Herbert that nothing had changed from OEM public timelines, describing decisions in “another couple of years,” a potential program launch “by the 2030 timeframe,” and entry into service in the “late 30s.”
Cash flow, balance sheet, capital returns, and leadership update
Hexcel generated $90 million of net cash from operating activities in the quarter, compared with a $29 million use in the first quarter of 2025. Lenz said working capital was a cash use of $63 million versus $98 million a year earlier. Free cash flow was a $6 million use, compared with a $55 million use last year, and Lenz noted the first quarter is typically a cash-use period for the company.
Management also highlighted balance sheet actions and shareholder returns. Gentile said Hexcel refinanced its $750 million revolver, extending maturity to 2031 from 2028. Lenz said the refinancing slightly improved pricing and included no substantive covenant changes. He reported leverage (net debt to last 12 months adjusted EBITDA) of 2.6x at March 31, 2026, and said the company aims to return leverage to its targeted 1.5x to 2.0x range during 2026.
Lenz said the accelerated share repurchase (funded by revolver borrowing in October 2025) concluded in early March, with about 4.5 million shares repurchased, or “almost 6%” of the outstanding float. He added that since the beginning of 2024, Hexcel has returned “over $800 million” to stockholders through dividends and share repurchases. The company did not repurchase shares in the first quarter of 2026; remaining authorization was $381 million at quarter end. The board declared a $0.18 quarterly dividend payable May 11 to stockholders of record May 4.
On M&A, Gentile told Wolfe Research that Hexcel is not planning acquisitions until leverage returns below 2x, and said future M&A would focus on advanced material science opportunities with an ROIC of 15% or greater.
Gentile also announced a leadership transition in finance, thanking Lenz for serving as interim CFO and stating that Jamie Coogan will start as Hexcel’s next CFO on May 1, with Lenz supporting the transition.
Addressing macro risk, Gentile said Hexcel is monitoring the Middle East situation and highlighted mitigating actions, including long-term contracts for many inputs and hedging propylene for eight quarters. He also said the company has forward buying programs in Europe, including natural gas, and emphasized that more than 90% of inputs for U.S. and European production are sourced from the U.S. and Europe.
Looking ahead, Gentile said the company believes market fundamentals support sustained demand across commercial, defense and space, and reiterated confidence in Hexcel’s ability to benefit from improving operating leverage as production rates continue to rise.
About Hexcel (NYSE:HXL)
Hexcel Corporation is a global leader in advanced composite materials for aerospace and industrial applications. The company specializes in the development and manufacture of lightweight, high-performance products that enhance fuel efficiency, durability and structural strength. Its offerings are critical to the aerospace sector, where demand for lighter, more efficient aircraft drives continuous innovation in materials.
Hexcel’s product portfolio encompasses carbon fiber reinforcements, pre-impregnated composites (prepregs), honeycomb core, engineered adhesives and structural film adhesives.
