Hexcel's A350 Ramps to a Higher Orbit

Hexcel Corporation delivered a second quarter that was far more than a beat-and-raise. With commercial aerospace production rates finally moving in a sustained fashion, the company's prepared remarks and Q&A painted a picture of a supplier no longer waiting for the cycle—but actively investing to ride it. Sales rose 8% to $529 million, adjusted EPS came in at $0.66, and management lifted full-year guidance to $2.025–$2.125 billion and $2.30–$2.40, respectively. The tone was confident, backed by hard evidence from Airbus and Boeing.

Commercial ramp into the sweet spot

The A350, Hexcel's largest program, is the centerpiece. “we now have firm orders from Airbus through the end of 2026 that confirm at least the 80 shipsets for the A350.” — Thomas Gentile, Chief Executive Officer · 2026-07-30 Airbus has publicly confirmed production at 8–9 aircraft per month, well ahead of the prior 80-unit expectation. This is a marked departure from the repeated destocking and schedule delays that plagued 2025. Even the 737 MAX is pulling above 42 units per month, and Boeing's expectation of 500 deliveries this year is now embedded in Hexcel's outlook. purchase order visibility has become the company's favorite talking point—Tom Gentile noted, “we have purchase orders, firm purchase orders now that support the 80 plus for the rest of the year.” — Thomas Gentile, Chief Executive Officer · 2026-07-30 The contrast with the first-quarter call, where management hedged on upside, is sharp. In April, Gentile had said, “we do see a little bit of upside on the A350 from the 80.” — Thomas C. Gentile, Chief Executive Officer · 2026-04-23 Now that upside is locked in.

The financials confirm the operating leverage. Quarter-over-quarter, gross margin expanded 4.4 percentage points year-over-year to 26.1%, and adjusted operating margin jumped from 11.1% to 13.9%. Operating margin is now on a clear upward trajectory. The company's own long-term projection—18% by the end of the decade—is no longer aspirational but a function of reaching peak production rates. “Leverage, defined as net debt to last 12 months adjusted EBITDA, was 2.3x at June 30, 2026, which compares favorably to our December 31, 2025 leverage of just under 2.7x.” — James Coogan, Chief Financial Officer · 2026-07-30

Capacity returns, cost absorption follows

To meet the demand, Hexcel is restarting idled lines and hiring. Salt Lake City's carbon fiber capacity is being brought back online.

the carbon fiber line is one that we had in Salt Lake City. We have 14. We had idled 4. We had already brought back 2. So we're bringing now 1/3 back.

Management was also candid about the cost environment. Oil prices and energy costs are hedged, but oil price volatility is a watch item. Still, the company's hedging program and long-term contracts provide a buffer. The portfolio pruning of the past year—divesting the Austrian industrial business and winding down Leicester—has paid off, with Engineered Products margins jumping from 10.9% to 15%.

A new CFO and a durable path forward

Jamie Coogan, the new CFO, hit the ground running, emphasizing “disciplined capital allocation” and a return to the 1.5–2.0x leverage target. The balance sheet is solid, and the company is paying down debt after the October 2025 revolver draw. Notably, no buybacks occurred in Q2, as debt reduction remains the priority—but the commitment to return cash once leverage normalizes is firm.

The bigger picture is that Hexcel is no longer a recovery story but a growth story. With the Airbus A350 at 8–9 per month and rising, and the 737 MAX accelerating, the $500 million in incremental commercial sales from existing contracts is becoming tangible. The “Airbus publicly confirmed that they are producing at a rate between 8 and 9 aircraft per month.” — Thomas Gentile, Chief Executive Officer · 2026-07-30 That is the kind of external validation that the market rewards.

The path to 18% operating margins is now supported by clear production visibility and capacity restarts. Hexcel’s stock is up 12% over the past 90 days, but the underlying fundamental shift suggests there may be more room to run.