Hexcel revenues drop in third quarter
STAMFORD — Aerospace materials maker Hexcel reported Monday plunging revenues as it grappled with continued disruption from the coronavirus crisis.
Third-quarter sales for the Stamford-based company percent dropped 50 percent year over year to about $287 million. It made a nearly $10 million profit, a fraction of the $80 million bottom line it recorded in the third quarter of last year.
The falloff reflected reduced demand across its commercial aerospace, space and defense, and industrial businesses. Among its largest customers, the company said sales for Boeing’s 737 MAX “continue to be at a very low level.”
“As the year has progressed, the dramatic downturn especially in the commercial aerospace market has become clearer and, as a result, we believe these channel adjustments will take another two to three quarters to work through the system,” CEO, Chairman and President Nick Stanage said in a statement. “We are staying close to our customers to understand their forecasts and to align with changing demand.”
Hexcel shares closed Tuesday at $34.10, down 6 percent from their Monday finish.
The pandemic has prompted sweeping changes within the company in the past few months.
As part of its earnings report, Hexcel disclosed that it planned to close early next month its wind energy “prepreg” production facility in Windsor, Colo. The company did not specify in the report if there would be any job losses as a result of that decision.
On Monday, Colorado labor department records did not list any layoffs made this year by Hexcel.
In the past few months, however, the company has reported major job cuts, including a total of nearly 300 layoffs at its plants in Burlington and Kent in Washington state.
As of Dec. 31, 2019, the No. 905 firm in this year’s Fortune standings had employed about 6,600 full-time employees and contract workers.
That contingent included about 3,600 in the United States and 3,000 in other countries.
About 45 employees are based at its main offices at 281 Tresser Blvd., according to its website.
COVID-19 has also stymied major deals. In April, Hexcel announced it would cancel a planned merger with another industry powerhouse, Woodward.
“As we look toward 2021, we will continue aligning our costs with projected sales and take swift actions to ensure that we continue delivering value to our shareholders now and well into the future,” Stanage said. “The overall long-term demand for aircraft and our advanced composites technology remains robust, and the potential for a significant upturn in 2022 and beyond looks positive. The actions we are taking will ensure that Hexcel emerges from the effects of this pandemic stronger than ever.”