Hexcel Lifts Buyback Authorization to $750 Million

The Tip Desk · October 26, 2026 · 3 min read

Third-quarter sales were $496.4 million, up 8.8% from a year earlier, as Commercial Aerospace reached 66.5% of the mix.

Hexcel Corporation (HXL), a maker of advanced lightweight composites, raised its share-repurchase authorization to $750 million from $381 million after a third quarter in which Commercial Aerospace sales reached $330.3 million, or 66.5% of the total, as the company left 2026 guidance unchanged.

Net sales were $496.4 million, up 8.8% from $456.2 million a year earlier, or 9.2% in constant currency. Sequential sales fell from $529.3 million in the second quarter, which Chairman, CEO and President Tom Gentile attributed to typical summer sales seasonality that also affected operating leverage. Adjusted diluted EPS was $0.50 a share, compared with $0.37 a year earlier; GAAP diluted EPS was $0.50 versus $0.26. Adjusted diluted EPS declined from $0.66 in the second quarter.

Commercial Aerospace sales rose 20.5%, or 21.0% in constant currency, from $274.2 million a year earlier. Gentile said both widebodies, including the Airbus A350 and Boeing 787, and narrowbodies including the Airbus A320 and Boeing MAX grew year over year, and that the industry recovery continues to take hold. Other Commercial Aerospace increased 1.3%. Commercial Aerospace’s share of sales rose to 66.5% from 60.1% a year earlier.

Defense, Space & Other sales were $166.1 million, down 8.7%, or 8.6% in constant currency, from $182.0 million a year earlier. The company said the decrease primarily reflected the previously disclosed divestment of a non-core Austrian-based industrial business at the end of September 2025, the closure of a non-core industrial business in Leicester, UK earlier this year, and temporary softness in F-35 and an international fighter program as well as launchers and rocket motors. Defense, Space & Other’s share of sales fell to 33.5% from 39.9%.

Gross margin expanded to 23.3% from 21.9% a year earlier as higher volume drove operating leverage. Adjusted operating income was $54.4 million, or 11.0% of sales, versus $44.8 million, or 9.8% of sales, a year earlier. GAAP operating income was $54.8 million versus $36.0 million. Adjusted operating margin compressed sequentially to 11.0% of sales from 13.9% in the second quarter. Selling, general and administrative expenses were 9.0% of sales, unchanged from a year earlier; research and development was 3.3% of sales versus 3.1%. Exchange rates were unfavorable by about 30 basis points on operating income as a percent of sales.

Composite Materials external sales were $390.3 million with a 14.7% operating margin. Engineered Products external sales were $106.1 million with an 11.8% operating margin.

Gentile said the company experienced near-term cost headwinds from accelerated hiring and training to support strong demand signals for the fourth quarter and 2027. The company is reaffirming 2026 guidance of sales of $2.025 billion to $2.125 billion, adjusted diluted EPS of $2.30 to $2.40, free cash flow greater than $195 million, and capital expenditures less than $100 million. Gentile said the company expects to return to its targeted leverage range by the end of 2026 after prioritizing debt repayment following the accelerated share-repurchase program initiated a year earlier.

No shares were repurchased in the third quarter. Remaining authorization was about $380.6 million as of September 30, 2026. The board declared a quarterly dividend of $0.18 a share, payable November 9, 2026.