NEW YORK (TheStreet) -- Shares of Hexcel Corp. (HXL - Get Report) are falling by 7% to $42.78 on heavy volume in early afternoon trading on Tuesday, after the composites company reported 2015 third quarter earnings results that fell short of analysts' estimates for the period.
The Stamford, CT-based company reported non-GAAP adjusted earnings of 55 cents per share on revenue of $448.8 million for the most recent quarter.
Analysts surveyed by Thomson Reuters had forecast for earnings of 59 cents per share on revenue of $462.49 million for the September ended period.
For the 2014 third quarter, Hexcel posted earnings of 57 cents per share on revenue of $451.9 million.
"I am pleased with the strength of our operating performance as we continue to expand capacity on time and on budget to meet customer demand. Commercial Aerospace sales increased 7.4% in constant currency as new commercial aircraft programs continue to increase production as expected. Space & Defense sales decreased 9.9% and Industrial sales decreased 6.3% in constant currency, muting the strength of Commercial Aerospace," company CEO Nick Stanage said in a statement.
Separately, TheStreet Ratings team rates HEXCEL CORP as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
We rate HEXCEL CORP (HXL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. We feel its strengths outweigh the fact that the company shows weak operating cash flow.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- HEXCEL CORP has improved earnings per share by 23.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HEXCEL CORP increased its bottom line by earning $2.12 versus $1.85 in the prior year. This year, the market expects an improvement in earnings ($2.39 versus $2.12).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Aerospace & Defense industry. The net income increased by 21.9% when compared to the same quarter one year prior, going from $50.60 million to $61.70 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 5.1%. Since the same quarter one year prior, revenues slightly increased by 1.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.41, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.14, which illustrates the ability to avoid short-term cash problems.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Aerospace & Defense industry and the overall market on the basis of return on equity, HEXCEL CORP has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: HXL