Gavin Parsons's questions to Hexcel Corp (HXL) leadership • Q4 2024
Question
Gavin Parsons asked if the inventory destocking consideration for the 737 MAX was also factored into guidance for other aircraft programs and when the company expects to return to more normal incremental margin performance.
Answer
Chairman, CEO & President Tom Gentile stated that destocking is a more significant factor for the MAX due to its production volatility, while other programs have tracked more closely with OEM rates. He reiterated that a return to normalized margins is tied to achieving higher operating leverage from increased revenues, which he anticipates when production rates near 2018 levels in 2026 or 2027.