Hexcel Corp (HXL), a manufacturer of lightweight and high-performance structural materials, has posted a 4.33 percent increase in profit for the quarter ended Jun. 30, 2014.

The company earned $50.60 million or $51 a share in the second-quarter compared with $48.50 million or $48 a share, a year ago. It has reported non-GAAP adjusted earnings of $0.55 a share as against analysts' expectation of $0.54 a share.

Revenue during the second-quarter grew 11.24 percent to $470.10 million from $422.60 million in the last year period.

Gross margin contracted by 18 basis points over the previous year period to 27.46 percent. Total expenses as a percentage of revenues increased to 84.02 percent from 82.99 percent in the same period last year. That has resulted in contraction of 104 basis points in operating margins to 15.98 percent.

The company disclosed operating income of $75.10 million, compared with $71.90 million in the last year period.

Mr. Stanage commented, "This was another strong quarter for Hexcel, as solid execution combined with continued strong Commercial Aerospace sales enabled us to deliver excellent results."
 
The company revised full year sales guidance to $1,810 million-$1,860 million from previous guidance of $1,800 million to $1,880 million. While it has raised adjusted diluted earnings per share guidance to $2.06 to $2.14 from previous guidance of $2.00 to $2.12.

Cash Flow

Hexcel Corp has generated cash of $110.30 million from operating activities during the first half, up 1.94 percent or $2.10 million when compared with the last year period. The company has generated 11.84 cents of operating cash flow in every sales dollar for the first half, down from 12.89 cents in the same period last year.

The company has spent $119.20 million cash to meet investing activities during the first half, as against cash outgo of $92 million in the last year period.

The company has spent $12.20 million from financing activities during the first half, as against cash inflow of $9 million in the last year period. It has borrowed net of $102.80 million through debt during the first half. It has spent net of $115 million on repurchase of common stocks.

As on Jun. 30, 2014, the company's cash balance stood at $43.80 million, down 22.75 percent or $12.90 million from Jun. 30, 2013.

Working Capital

Hexcel Corp has witnessed an increase in the working capital over the last one year. The company's working capital stood at $426.20 million as at Jun. 30, 2014, up $13.60 million or 3.30 percent from $412.60 million on Jun. 30, 2013. It registered a decrease in current ratio to 2.59 as at Jun. 30, 2014 from 2.93 on Jun. 30, 2013.

Debt Position

Hexcel Corp has witnessed an increase in the total debt over the last one year. As on Jun. 30, 2014, total debt stood at $397.80 million, up 26.69 percent or $83.80 million, from Jun. 30, 2013. The company total debt was 20.43 percent of total assets as on Jun. 30, 2014, compared with 18.53 percent on Jun. 30, 2013.

Interest coverage ratio, which determines how easily a company can pay interest expenses on outstanding debt, has improved to 37.55 from 34.24 in the same period last year.

Shares of Hexcel Corp gained $0.44 or 1.07 percent to trade at $47.73 on Monday.