July 27, 2009 / 9:59 PM / 10 years ago

UPDATE 1-Hexcel Q2 net falls; says Q3 to be 'low point' of year

* Q2 EPS 17 cents vs 27 cents yr-ago

* Q2 rev $277.3 mln vs $359.5 mln yr-ago

* Sees Q3 as the low point of the year

July 27 (Reuters) - Hexcel Corp (HXL.N), a maker of structural materials for the aerospace industry, posted a 37 percent drop in quarterly profit, hurt by lower revenue at its commercial aerospace and industrial businesses.

“We expect the third quarter to be the low point of the year as reduced commercial aerospace and wind demand combine with the normal summer seasonal slowdown,” Chief Executive David Berges said in a statement.

The company reported a second-quarter profit of $16.8 million, or 17 cents a share, compared with $26.7 million, or 27 cents a share, a year earlier. Excluding items, it earned 18 cents a share.

Revenue fell 23 percent to $277.3 million. Commercial aerospace revenue slumped 31 percent, and industrial segment revenue dropped 25 percent.

“The drop in commercial aerospace is related to significant supply chain inventory adjustments, the rapid decline in the regional and business aircraft market and new program delays,” Berges said.

Analysts on average expected the company to earn 19 cents a share, before items, on revenue of $301.5 million, according to Reuters Estimates.

Hexcel, which supplies composite materials to Boeing (BA.N), said it continued to cut headcount, costs, capital expenditure and inventories during the quarter, and is aggressively reducing plant schedules to better match near-term demand and improve cash flows.

“Clearly our previous planning assumption of reducing our cost structure to handle a 5 percent year over year volume decline is no longer appropriate,” Berges said.

Shares of the Stamford, Connecticut-based company closed down 38 cents at $9.73 Monday on the New York Stock Exchange. (Reporting by Eric Yep in Bangalore; Editing by Deepak Kannan)

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