This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Hexcel Management Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: HXL

Sales for legacy platforms at Airbus and Boeing were up modestly from the second quarter of 2011, but lower sequentially as sales rates moved back in line with aircraft production levels.

Sales to other commercial aerospace, which includes regional and business aircraft, were up over 10% compared to the prior year, but also slightly down sequentially.

Space & defense revenues were $88.1 million, up about 10% on a constant currency basis versus the second quarter of 2011 and up almost 4% from the first quarter. Growth in rotorcraft continues to be the primary driver.

In industrial markets, sales for the quarter were $77.6 million, up about 28% year-over-year in constant currency. Wind sales were up significantly over an easy comparison to last year's second quarter, and they have now grown sequentially for the last 6 quarters. While we're encouraged by this growth and the large backlog of turbines on order with our largest customer, our guidance for the year assumes a second half similar to the second half of 2011 due to economic and policy uncertainties.

Now let me turn it back over to Wayne for some additional comments on the financials.

Wayne C. Pensky

Thanks, Dave. Gross margin of $105.5 million for the quarter was 26.4% of sales as compared to 24.6% in the second quarter of 2011, due to good leverage on the strong sales volume and favorable impact of exchange rates.

SG&A and R&T cost grew less than revenues, and that's improved to 10.3% of sales. Our foreign exchange rates contributed about 30 basis points to the high operating income percentage in the quarter as compared to last year and about 40 basis points to the year-to-date operating income percentage. Our operating leverage continues to be strong. After adjusting for exchange rates, we delivered 28% incremental operating income on the sales growth for the quarter and 26% for the first half of the year.

3 of 4

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,416.85 +225.48 1.31%
S&P 500 2,021.25 +19.09 0.95%
NASDAQ 4,683.4070 +45.4130 0.98%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs