US-based advanced composites manufacturer Hexcel Corporation has reported sales of $457.7 million, up 17.2 per cent, in the first quarter (Q1) of fiscal 2023 (FY23), compared to $390.6 million in the same quarter of the previous year. The company's GAAP diluted earnings per share (EPS) for Q1 FY23 were $0.50, a significant increase from Q1 FY22's $0.21. Meanwhile, adjusted diluted EPS was $0.50, compared to $0.22 in the same period last year.

Hexcel's commercial aerospace unit was the main growth driver for Q1 FY23, accounting for 62 per cent of year-to-date sales, as sales reached $284.5 million, a 30 per cent increase year-over-year (YoY). The Airbus A350 and A320neo programmes were the main contributors to the growth. Sales for other commercial aerospace, which includes business jets, increased 23.5 per cent YoY due to expanding demand, the company said in a media release.

Hexcel's space and defence unit accounted for 28 per cent of year-to-date sales in Q1 FY23, with sales of $126.2 million, up 6.8 per cent compared to Q1 FY22, driven by growth across a range of platforms globally.

Industrial sales, which accounted for 10 per cent of year-to-date sales, reached $47 million in Q1 FY23, a decrease of 12.1 per cent compared to Q1 FY22, due to lower wind energy sales that were partially offset by sales growth in recreation, automotive, and other industrial markets.

Overall, gross margin for Q1 FY23 was 27.9 per cent, compared to 22.2 per cent in Q1 FY22, driven by strong production volume leverage, a favourable sales mix, favourable absorption, and a beneficial foreign exchange impact.

Hexcel's adjusted operating income in Q1 2023 was $63.0 million, or 13.8 per cent of sales, compared to $31.1 million, or 8 per cent of sales in 2022, reflecting the favourable impact of exchange rates on operating income as a percentage of sales, which was approximately 80 basis points in Q1 FY23 compared to Q1 FY22.

The company's 2023 guidance remains unchanged, with sales projected to reach $1.725 billion to $1.825 billion and adjusted diluted earnings per share of $1.70 to $1.90, the release added.

“Our relentless focus on execution and growing demand drove an 18 per cent increase in sales, and we delivered adjusted operating income that was more than double the same period last year. The margin expansion reflects strong operating leverage from higher production levels as our key markets grow. Hexcel is well-positioned to benefit from the multi-year production ramps our aerospace customers have announced, as well as growth in other markets, all of which will lead to significant cash generation and expanding shareholder value,” said chairman, CEO, and president, Nick Stanage.