Hexcel reports operating income for the 2009 second quarter (ended 30 June 2009) of $29.7 million, compared to $29.3 million for the 2008 quarter. Net income was $16.8 million, compared to $26.7 million in 2008.
Hexcel, headquartered in Stamford, Connecticut, USA, manufactures advanced composites, including carbon fibres, reinforcements, prepregs, honeycomb, matrix systems, adhesives and composite structures. Its products are used in commercial aerospace, space and defence, and industrial applications such as wind turbine blades.
Commercial aerospace
The commercial aerospace sector accounts for around 50% of Hexcel's sales.
ales to this sector for the 2009 second quarter were $137.8 million, 30.6% down (28.1% in constant currency) on the second quarter 2008. This was a result iof customer sales declines to Airbus, Boeing and their subcontractors, particularly for Airbus programmes.
Sales to 'other' commercial aerospace applications, including regional and business aircraft, were over 40% below the 2008 second quarter following production cut-backs. This sector represented 28% of Hexcel's commercial aerospace sales in 2008.
Revenues attributed to new aircraft programmes (A380, A350, B787, B747-8) were just above those in the first quarter of 2009, but lower than 2008, mainly as a result of delays to the Boeing 787 Dreamliner programme.
Space & Defence
Hexcel's sales to space and defence applications in the 2009 second quarter were $74.7 million, down 0.4% (up 2.8% in constant currency) on the second quarter of 2008. Rotorcraft sales were a strong contributor and are expected to help offset the impact of a potential wind-down of the F22 or C17 programmes.
Industrial
Hexcel reports sales to the industrial sector of $64.8 million for the second quarter of 2009, down 24.5% (15.6% in constant currency) over 2008, mainly as a result of changes in the wind energy and automotive markets. The company says that year to date wind energy sales are now flat in constant currency compared to first half of 2008, and existing and new wind turbine projects are being hampered by difficult credit markets. Hexcel believes the American Recovery and Reinvestment Act of 2009 should help restart orders in the USA, but global financing could be a problem for the next few quarters.
Industrial sales excluding the wind energy and automotive sectors were down slightly for the quarter compared to second quarter 2008 in constant currency, but are up year-to-date thanks to sales to the American Centrifuge Project.
Hexcel net sales by market segment (US$ million, unaudited).
| |
Commercial aerospace |
Space & Defence |
Industrial |
Total |
| Second quarter 2009 |
137.8 (50%) |
74.7 (27%) |
64.8 (23%) |
277.3 (100%) |
| Second quarter 2008 |
198.7 (55%) |
75 (21%) |
85.8 (24%) |
359.5 (100%) |
| First six months 2009 |
291.6 (50%) |
152.0 (26%) |
141.0 (24%) |
584.6 (100%) |
| First six months 2008 |
390.6 (56%) |
149.3 (21%) |
164.1 (23%) |
704.0 (100%) |
“The drop in commercial aerospace is related to significant supply chain inventory adjustments, the rapid decline in the regional and business aircraft market and new programme delays," says Hexcel CEO David E. Berges. "The wind energy market is also now experiencing lower levels of demand as financing issues facing wind generator customers have begun to delay previously announced projects.”
Berges expects the third quarter to be the low point of the year as reduced commercial aerospace and wind demand combine with the normal summer seasonal slowdown.
"While we expect further weakness in regional and business aircraft sales, we are hopeful that thawing in credit markets, renewable energy policy and new aircraft programe progress may begin to offset market softness in 2010,” he concludes.