Hexcel’s net sales and income fell sharply in the first quarter of 2020, as coronavirus caused plant closings and the continued grounding of the Boeing 737 MAX airliner dealt a double blow to the US-based aircraft parts maker.
Hexcel is based in Stamford, Connecticut, in the US. (Hexcel)
Net sales totalled USD541 million in the first quarter, down 11.3% from the same period in 2019, the company said late on 20 April. Net income plunged 41.3% to USD42.4 million.
Hexcel said its 737 MAX production is at a standstill, while the coronavirus disease (Covid-19) has “forced temporary closures at a number of our plants as well as customer plants.” The customer plants include Airbus and Boeing factories.
With Hexcel expecting reduced demand for the rest of the year, it is implementing a series of cost-saving measures, including workforce reductions; unpaid furloughs; cuts in pay, benefits, and capital expenditures; and the suspension of dividends and stock buybacks. The company aims to slash labour costs by 30%.
While Hexcel’s commercial aerospace and industrial markets both saw sales declines in the first quarter, the space and defence market was a bright spot, gaining 3.5% to USD111.6 million.
Defence programmes that are bolstering Hexcel include the Lockheed Martin F-35 Joint Strike Fighter, the Sikorsky CH-53K King Stallion heavy-lift helicopter, and the Sikorsky UH-60 Black Hawk medium-lift helicopter. With CH-53K production ramping up for the US Marine Corps, Hexcel expects its revenue from that programme to jump 500% from 2019–23.
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