Archive: Hexcel (HXL)

HXL: Hexcel Needs to Hit Stride

Small Cap Watch List (Track at Marketocracy) and Mid Cap Watch List (Track at Marketocracy) member Hexcel Corporation (HXL) reported results for the second quarter of 2007. Net sales from continuing operations in the quarter were $289.8 million, 5.8% higher than the $274.0 million reported for the second quarter of 2006 but below the consensus estimate of $296 million. Net income from continuing operations for the second quarter of 2007 was $17.5 million, or $0.18 per diluted share, slightly ahead of consensus. Net loss from discontinued operations was $8.7 million, or $0.09 per diluted share including an after-tax charge of $9.7 million for previously disclosed legal matters. According to the company:

The second quarter saw a continuation of the first quarter sales pattern for the commercial aerospace market. Because of the A380 delay, Airbus sales were again down significantly from a year ago, but strong demand from all other major customers resulted in the almost 9% overall growth in our commercial aerospace sales. Start-up, training and qualification efforts combined with some unplanned maintenance outages put some pressure on our margins but we still met our guidance targets and expect better year-on-year margin expansion for the remainder of 2007.

The ramp up of new B787 and A380 programs layered on top of increasing aircraft build rates should provide opportunity for good volume leverage next year. Longer term we are encouraged by the continued strength in wind turbine and aircraft orders, especially the new composite intensive A350 XWB.

I’ve commented at length about the A380 problems  and I’ve also noted the extraordinary pricing power enjoyed by turbine makers. If the company could start hitting on all cylinders it might be a strong performer. As it is, the company raised sales guidance to the high end of prior levels.

Topics: Electronic Instruments and Controls, Hexcel (HXL), Mid Cap Watch List, Small Cap Watch List, Stock Market, Technology, Watch List | No Comments

The Week Ahead – 21 July 2007

The Economic Calendar is quiet in the early part of this week but there are important reports at the end of the week. On Thursday is the Durable Goods report, for which the consensus estimates a 2.0% increase. On Friday is the Preliminary Estimate of 2Q GDP, which the consensus has pegged at 3.2%. That sounds a little high to me based on the economic data table I’ve been compiling.

EconomicData

Bad and Deteriorating Bad but Improving Good but Deteriorating Good and Improving
Existing Homes (June) Chicago Fed NAI (May) Consumer Confidence (June) Real Disposable Income
Employment (June) Durable Goods (June) Personal Spending (June) ISM Manufacturing (July)
New Home Sales (June) Construction Spending Retail sales (August 2007) ISM Services (June)
ATA Truck Tonnage (June) CPI (July 07) Leading Indicators (June)  
GDP (Q2 Advance) Trade deficit (July 07)    
PPI (July 07) Durable Goods (July)    
Industrial Production (July 07)      
Housing Starts (July 07)      
       
       

The Earnings Calendar is as busy as it can get. Some of the names I’ll be watching:

Monday

Tuesday

  • CH Robinson (CHRW - Annual Report) – estimates have been rising and now stand at $0.47, but Landstar (LSTR - Annual Report) disappointed.
  • CDW Corporation (CDWC) – stellar monthly sales reports have kept estimates rising. They now stand at $0.97.
  • EMC Corporation (EMC - Annual Report) – The big news is still the VMWare IPO, but it is also a decent look at enterprise tech spend.
  • Laboratory Corporation of America (LH) – The Mid Cap and Large Cap Watch List (Track at Marketocracy) member has been seeing positive earnings revisions and is now expected to earn $1.09 on $1.03 billion in revenue.
  • Lexmark (LXK) preannounced and will probably offer poor guidance.
  • Linear Technology (LLTC) – expected to earn $0.35 on $267 million in sales.
  • Norsk Hydro (NHY) – The Large Cap Watch List (Track at Marketocracy) member has no analyst coverage right now.
  • Plantronics (PLT) – my covered call position is now being cashed out so I’ve no skin in this one. But it is often volatile.
  • United Parcel Services (UPS) is a great read on the health of the economy. Expectations are $1.03 on $12.23 billion in revenue.

Wednesday

Thursday

Disclosure: William Trent has a long position in SMH.

Topics: Air Courier, Altera (ALTR), Basic Materials, CDW Corp (CDWC), CH Robinson Worldwide (CHRW), Colgate Palmolive (CL), Communications Equipment, Computer Hardware, Computer Peripherals, Computer Storage Devices, Conglomerates, Consumer Non-cyclical, Corning (GLW), Durable Goods, EMC Corp. (EMC), Economy, Electronic Instruments and Controls, Federated Investors (FII), Financials, Freeport McMoRan (FCX), GDP, Graco (GGG), Healthcare, Healthcare Facilities, Hexcel (HXL), Ingram Micro (IM), Investment Services, Iron and Steel, Laboratory Corp. of America (LH), Large Cap Watch List, Lexmark (LXK), Linear Technology (LLTC), MEMC Electronic Materials (WFR), Metals and Mining, Mid Cap Watch List, Miscellaneous Capital Goods, Miscellaneous Transportation, Norsk Hydro (NHY), Personal and Household Products, Plantronics (PLT), Retail (Catalog and Mail Order), Semiconductors, Services, Small Cap Watch List, Steel Dynamics (STLD), Stock Market, Technology, Texas Instruments (TXN), Transportation, United Parcel Service (UPS), Watch List, Xerox (XRX), Xilinx (XLNX) | 3 Comments

Small Cap Watch List Changes

With the end of the first quarter approaching, it is time to adjust the names in my Watch Lists. I will price all the new lists as of the close on Friday, June 29.

Today I present my planned updates to the Small Cap Watch List. There was a fairly high level of turnover to the list. 12 of the 24 names from the previous run made it to the current list, which was also 24 names. Performance-wise, the list created in March has returned an unweighted average return of 2.6% through June 28, with 80% of the stocks in positive territory. All of the money-losers from the previous list fell out of consideration.
So without further ado, the names on the chopping block from the previous list are: PW Eagle (PWEI), Insteel Industries (IIIN), Allied Defense (ADG - Annual Report), Hartmarx (HMX), Parlux (PARL), Hansen Natural (HANS), FirstFed Financial (FED), Young Innovations (YDNT), ITT Educational (ESI), Rent-a-Center (RCII), Valassis (VCI), and Travelzoo (TZOO). The castaways include four of the five money losers from the previous portfolio (HMX, PARL, YDNT and TZOO) as well as the biggest gainer (ESI).
The new list is:

070630smallcap.jpg

I will continue to track both lists on StockPickr.

Topics: Aeropostale (ARO), Allied Defense (ADG), American Oriental Bioengineering (AOB), Big Five Sporting Goods (BGFV), Central European Media (CETV), DXP Enterprises (DXPE), Delta Apparel (DLA), First Regional Bancorp (FRGB), FirstFed Financial (FED), Hansen Natural (HANS), Hartmarx (HMX), Helix Energy Solutions (HLX), Hexcel (HXL), ITT Educational Services (ESI), Impac Mortgage (IMH), Ingram Micro (IM), Interdigital Communications (IDCC), Landstar Systems (LSTR), NVR (NVR), New Jersey Resources (NJR), Nutri Systems (NTRI), PWEI, Parlux Fragrances (PARL), Pinnacle Airlines (PNCL), Prepaid Legal (PPD), RAD, Reliv International (RELV), Rent-A-Center (RCII), Russell 2000 (RUT), S&P Smallcap 600 (SML), Silgan (SLGN), Stock Market, Tempur-Pedic (TPX), Travelzoo (TZOO), US Concrete (RMIX), Vaalco Energy (EGY), Valassis Communications (VCI), Watch List, Young Innovations (YDNT) | No Comments

Hexcel Reports 2007 First Quarter Results: Financial News – Yahoo! Finance

Small Cap Watch List (Track at Marketocracy) member Hexcel Reports 2007 First Quarter Results: Financial News:

Hexcel Corporation (HXL), today reported results for the first quarter of 2007. Net sales for the quarter were $328.7 million, 9.1% higher than the $301.2 million reported for the first quarter of 2006. Operating income for the first quarter was $33.7 million compared to $29.1 million for the same quarter last year. Net income from continuing operations for the first quarter of 2007 was $16.5 million, or $0.17 per diluted common share compared to $14.0 million or $0.14 per diluted common share in 2006. Net income was $23.5 million, or $0.24 per diluted common share compared to $14.5 million or $0.15 per diluted common share in 2006. Net income includes net income from discontinued operations of $7.0 million after reflecting a $6.8 million gain on the sale of Hexcel’s architectural business.

Analysts were expecting the company to post $0.15 in EPS on $307 million in sales, both of which were handily beaten. Guidance for 2007 is unchanged, which nitpickers could construe as a reduction of guidance for the remaining quarters given the beat in the first. Judging from the gain in the shares during and after normal trading hours yesterday, however, there appear to be few nitpickers.

The balance sheet looks solid and cash flows were negative due to seasonal factors.

Hexcel develops, manufactures and markets lightweight, high-performance structural materials, including carbon fibers, reinforcements, prepregs, honeycomb, matrix systems, adhesives and composite structures, used in commercial aerospace, space and defense and industrial applications. It is a subcontractor for both Boeing and Airbus, which helps insulate the company from market share shifts between the two.

Topics: Hexcel (HXL), Stock Market | No Comments

HXL: Hexcel Takes CFO Departure in Stride

We’re beginning to wonder if there’s something in the water, as we’ve now seen CFO departures at four of our Watch List firms. The current departure is from Small Cap Watch List (Track at Marketocracy) member Hexcel Corporation (HXL), which reports:

Hexcel Corporation today announced that Mr. Wayne Pensky will be appointed Senior Vice President and Chief Financial Officer. The current Chief Financial Officer, Mr. Stephen Forsyth has advised that he is leaving the company on April 27, 2007 to join Chemtura Corporation (NYSE:CEM – News) as its Executive Vice President and Chief Financial Officer.

Although CFO departures are frequently considered a warning sign, we have noted before that the CFO leaving for another job carries less of a stigma for the company. Furthermore, the new chief appears well qualified.

Mr. Pensky joined Hexcel in July 1993 as Corporate Controller, having previously been a partner in a public accounting firm. In 1998 he was named Vice President, Finance and Controller of Hexcel’s Composites global business unit. In that role he has been responsible for accounting, planning, analysis and control activities of the business in the U.S. and internationally. Since last summer, he has led the process to integrate and consolidate Hexcel’s operational finance & accounting organization. He will relocate from Hexcel’s offices in Dublin, California to the corporate headquarters in Stamford, Connecticut.

Hexcel shares were off modestly on the news.

Topics: Hexcel (HXL), Stock Market | 1 Comment

Small Cap Watch List Changes

With the end of the first quarter approaching, it is time to adjust the names in our Watch Lists. We will price all the new lists as of the close on Friday, March 30. Today we present our planned updates to the Small Cap Watch List (Track at Marketocracy).

Frankly, we were surprised at the amount of turnover in our screens. Only 9 of the original 29 names made the cut for the new list (which comes in at only 24 names.) Still, given the level of outperformance we saw in the first quarter (actually just two months) and the fact that much of those gains were achieved early, perhaps the turnover is warranted.

So without further ado, the names on the chopping block from the previous list are:

Silgan Holdings (SLGN - Annual Report); Steel Dynamics (STLD - Annual Report); NVR (NVR - Annual report); Middleby (MIDD); Vector Group (VCG); Sanderson Farms (SAFM); Downey Financial (DSL); Waddell & Reed (WDR); Wilshire Bancorp (WIBC); Harrington West (HWFG); Gamco Investors (GBL); Apria Healthcare (AHG); Papa John’s (PZZA); Cato Corporation (CTR); Meredith Corporation (MDP); CSG Systems (CSGS); Energy East (EAS); Dynamics Research (DRCO); Ingram Micro (IM); and Dade Behring (DADE).

The new watch list will be:

070330SmallCapWatchList.jpg

Topics: Aeropostale (ARO), Allied Defense (ADG), Apria Healthcare Group (AHG), Big Five Sporting Goods (BGFV), CSG Systems (CSGS), Cato (CTR), DXP Enterprises (DXPE), Dade Behring (DADE), Downey Financial (DSL), Dynamics Research (DRCO), Energy East (EAS), FirstFed Financial (FED), Gamco (GBL), Harrington West Financial (HWFG), Hartmarx (HMX), Helix Energy Solutions (HLX), Hexcel (HXL), Ingram Micro (IM), Insteel Industries (IIIN), Meredith (MDP), Middleby (MIDD), NVR (NVR), Nutri Systems (NTRI), PWEI, Papa John's (PZZA), Parlux Fragrances (PARL), Rent-A-Center (RCII), Sanderson Farms (SAFM), Sasol (SSL), Steel Dynamics (STLD), Stock Market, Vaalco Energy (EGY), Valassis Communications (VCI), Vector Group (VGR), Waddell and Reed (WDR), Wilshire Bancorp (WIBC), Young Innovations (YDNT) | No Comments