Parker(PH)

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Parker(PH) - 2024 Q1 - Earnings Call Transcript
2023-11-02 19:56
Financial Data and Key Metrics - Organic growth remained positive at 2.3%, with a slight favorable currency impact of 1% in the quarter [4] - Adjusted segment operating margin increased by 220 basis points to 24.9%, and adjusted EBITDA margin increased by 150 basis points to 24.8% [4] - Sales in North America increased by 4.5%, generating $2.2 billion, with organic growth slightly positive at 0.5% [5] - Aerospace sales were $1.2 billion, a 65% increase YoY, with organic growth of 16% [8] - Operating margins in aerospace reached a record 26%, up 610 basis points, driven by strong aftermarket growth and rate increases [9] - Cash flow from operations increased by 42% YoY to $650 million, and free cash flow increased by 48% to $552 million [10] - Debt was reduced by $370 million in the quarter, with a total reduction of $1.8 billion since the Meggitt acquisition, improving leverage by 1.2 turns [11] Business Line Performance - Aerospace business now represents 30% of the company's portfolio, with strong growth driven by commercial and military sectors [2][3] - Aerospace orders increased by 24%, with double-digit growth across all market platforms [8][9] - The Meggitt acquisition has exceeded expectations, contributing significantly to the aerospace segment's performance [2][14] - All segments delivered adjusted operating margins above 24%, a first in the company's history [13] Market Performance - North America saw a 4.5% increase in sales volume, with $2.2 billion in sales, though organic growth was only 0.5% due to destocking and channel rebalancing [5][6] - International sales were $1.4 billion, a 2.5% increase YoY, but organic growth was negative 2% [16] - Asia Pacific, particularly China, showed softness, impacting overall international performance [16][35] Company Strategy and Industry Competition - The company is well-positioned for growth in clean technologies, with 2/3 of its portfolio supporting clean energy initiatives [1] - The Win Strategy continues to drive growth and financial performance, with a focus on expanding margins and achieving long-term goals [45][75] - The aerospace sector is a key growth differentiator, with strong secular trends in both commercial and military markets [3][76] - The company is committed to reducing leverage and has already reduced debt by $1.8 billion since the Meggitt acquisition [11][17] Management Commentary on Operating Environment and Future Outlook - Management expressed confidence in achieving 4% to 6% organic growth over the cycle, driven by strong portfolio positioning and execution [1][4] - The aerospace sector is expected to continue its strong performance, with double-digit growth in aircraft deliveries and air traffic [3][8] - The company raised its full-year organic growth guidance for aerospace by 200 basis points to 10% [20] - Management highlighted the strong performance of the Meggitt acquisition and its contribution to the company's growth [14][74] Other Important Information - The company expects a tax rate of 23.5% for Q2 through Q4, with a full-year tax rate of 23% [29] - Adjusted EPS for the full year is expected to be $23, with a range of $0.40 plus or minus [29] - The company is forecasting mid-teens cash flow from operations and expects to maintain a free cash flow conversion rate of over 100% [17] Q&A Session Summary Question: Guidance and EPS Decline - Andrew Obin questioned the sequential decline in EPS, noting it seemed more significant than historical trends [49] - Management clarified that the decline is due to seasonality and volume, with no abnormal one-time items expected in Q2 [34] Question: North American Orders and Inventory - Lee Banks discussed inventory balancing in North America, noting that destocking and channel rebalancing are ongoing and expected to continue into 2024 [28][33] - Management expressed confidence in North American end markets, despite some softness in certain sectors [33][37] Question: Aerospace Performance and Guidance Raise - Mig Dobre asked about the aerospace guidance raise and the impact of aftermarket growth [111] - Management confirmed that aftermarket growth was a significant driver of the aerospace segment's strong performance and the guidance raise [111][112] Question: Industrial Backlog and Order Trends - Mircea Dobre inquired about the elevated industrial backlog and whether it was due to supply chain issues or changes in customer ordering behavior [107] - Management attributed the backlog to the transformation of the portfolio, which has shifted towards longer-cycle business, and noted that backlog coverage remains strong despite declining orders [108][110] Question: Cost Containment and Restructuring - Brett Linzey asked about cost-containment measures in response to market choppiness and destocking [157] - Management highlighted the company's decentralized approach to cost control, with $70 million in restructuring costs planned for the year [158][164] Question: Meggitt Synergies and ROI - Nathan Jones questioned whether the outperformance of the Meggitt acquisition could lead to double-digit ROI in year 5 [171] - Management expressed satisfaction with Meggitt's performance but noted it is still early days, with a focus on executing the 3-year synergy plan [172]
Parker(PH) - 2023 Q4 - Annual Report
2023-08-24 12:34
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File No. 1-4982 PARKER-HANNIFIN CORPORATION (Exact name of registrant as specified in its charter) Ohio 34-0451060 (State or other jurisdiction of Incorporation or ...
Parker(PH) - 2023 Q4 - Earnings Call Transcript
2023-08-03 18:34
Parker Hannifin Corporation (NYSE:PH) Q4 2023 Results Conference Call August 3, 2023 11:00 AM ET Company Participants Jenny Parmentier - CEO Todd Leombruno - CFO Lee Banks - Vice Chairman and President Conference Call Participants Julian Mitchell - Barclays Joe Ritchie - Goldman Sachs Andrew Obin - Bank of America Nathan Jones - Stifel Jeff Sprague - Vertical Research Partners David Raso - Evercore ISI Josh Pokrzywinski - Morgan Stanley Joe O’Dea - Wells Fargo Jamie Cook - Credit Suisse Jeffrey Hammond - Ke ...
Parker(PH) - 2023 Q3 - Quarterly Report
2023-05-05 11:50
OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q For the transition period from to ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File number 1-4982 For the quarterly period ended March 31, 2023 PARKER-HANNIFIN CORPORATION (Exact name of registrant as specified in its charter) | | | (State or other jurisdiction of Incorporation o ...
Parker(PH) - 2023 Q3 - Earnings Call Presentation
2023-05-04 18:21
Fiscal 2023 Third Quarter Earnings Presentation LISTED May 4, 2023 Non-GAAP Financial Measures Among other factors which may affect future performance are: the impact of the global outbreak of COVID-19 and governmental and other actions taken in response; changes in business relationships with and purchases by or from major customers, suppliers or distributors, including delays or cancellations in shipments; disputes regarding contract terms or significant changes in financial condition, changes in contract ...
Parker(PH) - 2023 Q3 - Earnings Call Transcript
2023-05-04 16:41
Parker-Hannifin Corporation (NYSE:PH) Q3 2023 Earnings Conference Call May 4, 2023 11:00 AM ET Company Participants Todd Leombruno - Executive Vice President & Chief Financial Officer Jennifer Parmentier - Chief Executive Officer Lee Banks - Vice Chairman & President Conference Call Participants Joe Ritchie - Goldman Sachs Andrew Obin - Bank of America Scott Davis - Melius Research Mig Dobre - Baird Julian Mitchell - Barclays Jamie Cook - Credit Suisse Nathan Jones - Stifel Nigel Coe - Wolfe Research Jeffre ...
Parker(PH) - 2023 Q2 - Quarterly Report
2023-02-07 13:03
UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File number 1-4982 PARKER-HANNIFIN CORPORATION (Exact name of registrant as specified in its charter) | | | (State or other jurisdiction of Incorporatio ...
Parker(PH) - 2023 Q2 - Earnings Call Transcript
2023-02-02 19:25
Parker-Hannifin Corporation (NYSE:PH) Q2 2023 Earnings Conference Call February 2, 2023 11:00 AM ET Company Participants Todd Leombruno - EVP & CFO Jennifer Parmentier - CEO Lee Banks - Vice Chairman and President Conference Call Participants Jamie Cook - Credit Suisse Andrew Obin - Bank of America Scott Davis - Melius Research Julian Mitchell - Barclays Jeffrey Sprague - Vertical Research Partners Mircea Dobre - Robert W. Baird & Co. Stephen Volkmann - Jefferies Joshua Pokrzywinski - Morgan Stanley Joseph ...
Parker(PH) - 2023 Q1 - Quarterly Report
2022-11-04 12:12
Financial Performance - Net sales for the three months ended September 30, 2022, were $4,233 million, an increase of 12.5% compared to $3,763 million for the same period in 2021[91]. - Gross profit margin improved to 34.0% in the current year from 33.4% in the prior year, primarily due to higher sales volume and cost management[91]. - Selling, general and administrative expenses rose to $836 million, representing 19.7% of sales, up from 16.7% in the prior year[91]. - Net income decreased to $388 million, or 9.2% of sales, compared to $451 million, or 12.0% of sales, in the prior year[91]. - The Diversified Industrial North America segment reported net sales of $2,132 million, an increase of 18.8% year-over-year, while the International segment saw a slight decline of 1.6%[104][106]. - Aerospace Systems Segment net sales for the current-year quarter reached $746 million, up from $593 million in the prior-year period, with Meggitt contributing $115 million in sales[117][118]. Expenses and Margins - The operating margin for the Aerospace Systems Segment decreased to 12.4% from 20.0% year-over-year, attributed to higher commercial OEM volume and acquisition-related expenses[117][119]. - The effective tax rate for the current quarter was 22.9%, higher than the 21.0% in the comparable prior-year period[91]. - The company experienced a foreign currency transaction loss of $36 million in the current quarter, compared to a gain of $9 million in the prior year[98]. Backlog and Future Expectations - The backlog for the Diversified Industrial Segment increased to $4,901 million, up from $3,583 million in the prior year[104]. - As of September 30, 2022, the backlog for the Diversified Industrial Segment increased to $4.5 billion, primarily due to orders exceeding shipments and the addition of Meggitt backlog[114]. - The company anticipates incurring approximately $40 million in additional business realignment and acquisition integration charges for the remainder of fiscal 2023[112]. - The company expects to incur approximately $46 million in additional business realignment and acquisition integration charges in the remainder of fiscal 2023[120]. - The company anticipates that changes in economic conditions, including the impacts of the Russia-Ukraine war and COVID-19, may materially affect future performance[154]. Cash Flow and Financing - Cash provided by operating activities increased to $457 million for the first three months of fiscal 2023, compared to $424 million in the same period of fiscal 2022[129]. - Cash flows from investing activities were significantly impacted by strategic acquisitions and capital expenditures of $84 million in fiscal 2023[131]. - The company has a line of credit totaling $3.0 billion, with $1.7 billion available as of September 30, 2022[138]. - The debt to debt-shareholders' equity ratio was 0.62 to 1.0 as of September 30, 2022, indicating compliance with financial covenants[140]. Acquisitions and Divestitures - The company completed the acquisition of Meggitt for an aggregate cash purchase price of $7.2 billion, including debt assumption, at a price of 800 pence per share[145]. - The company sold its aircraft wheel and brake business for proceeds of $441 million as part of commitments made to the European Commission regarding the Meggitt acquisition[147]. - Acquisitions and divestitures impacted sales by approximately $143 million and $3 million, respectively, during the current-year quarter[94]. Debt and Interest Rates - A 100 basis point increase in near-term interest rates would increase annual interest expense on variable rate debt by approximately $37 million[153]. - The company has a debt portfolio that includes $2 billion of variable rate debt, aiming for a 60/40 mix between fixed and variable rate debt[153]. - The company fully drew against a $2.0 billion Term Loan Facility in September 2022 to finance part of the acquisition, which matures in September 2025[144]. Currency Risk Management - The company expects to manage foreign currency transaction and translation risk using existing processes, especially after the acquisition of Meggitt[150]. - The company has deal-contingent forward contracts with an aggregate notional amount of £6.4 billion to mitigate currency risk related to the acquisition[146]. - The company does not believe that changes in the availability of supply chain financing will significantly impact its liquidity[142].
Parker(PH) - 2023 Q1 - Earnings Call Transcript
2022-11-03 18:08
Parker-Hannifin Corporation (NYSE:PH) Q1 2023 Earnings Conference Call November 3, 2022 11:00 AM ET Company Participants Todd Leombruno - EVP & CFO Thomas Williams - Chairman & CEO Jennifer Parmentier - COO Lee Banks - Vice Chairman & President Conference Call Participants Scott Davis - Melius Research Andrew Obin - Bank of America Merrill Lynch Jeffrey Sprague - Vertical Research Partners David Raso - Evercore ISI Stephen Volkmann - Jefferies Jamie Cook - Crédit Suisse Nigel Coe - Wolfe Research Joseph Rit ...