Hot stock to watch: Hexcel Corporation (NYSE: HXL)

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Hexcel Corporation (NYSE: HXL) stock rose over 2.1% on 22nd October, 2019 (as of 11:45 am GMT-4; Source: Google fiannce) after the company posted mixed results for the third quarter of FY 19 and downward revision of sales forecast for FY 19. The generation of Cash from Operations continued to be strong and is now $277 million YTD.  Sales has grown 11.4% to $1,791.4 million for the nine months ended September 30, 2019. Gross margin for the third quarter of 2019 has improved to 27.6% compared to 26.5% in the third quarter of 2018 on the back of strong operational execution combined with the decline in a number of operational headwinds incurred in 2018. Operating income in the third quarter of 2019 was $109.9 million, which is 19.2% of sales, compared to $96.5 million, or 17.9% of sales, in 2018.

For the first nine months of 2019, the net cash generated from operating activities was $277.3 million, compared to $278.4 million in the first nine months of the prior year. Capital expenditures were $162.7 million for the first nine months of FY19, compared to $150.2 million for the first nine months of FY18. The company has generated the free cash flow of $114.6 million for the first nine months of 2019, compared to $128.2 million for the same period of the prior year.

HXL in the third quarter of FY 19 has reported the adjusted earnings per share of 90 cents, beating the analysts’ estimates for the adjusted earnings per share of 89 cents, as per Zacks Investment Research. The company had reported the adjusted revenue growth of 5.9 percent to $572.50 million in the third quarter of FY 19

Additionally, the Company has used $55.7 million to repurchase shares of its common stock during the third quarter of 2019 and used $66.9 million for share repurchases in the first nine months of 2019. The Company has $318 million remaining under the authorized share repurchase program. HXL has declared a quarterly dividend of $0.17 per share, which is payable to stockholders of record as of November 1, 2019, with a payment date of November 8, 2019.

For FY 19, the company expects sales to be in the range of $2.340 billion to $2.400 billion compared to the previous forecast to range between $2.375 billion and $2.475 billion. 2019 adjusted diluted earnings per share is expected to be in the range of $3.43 to $3.53, Free cash flow to be greater than $250 million and Accrual basis capital expenditures is expected to be in the range of $170 million to $190 million.

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