Core Viewpoint - Parker-Hannifin reported quarterly earnings of $6.53 per share, exceeding the Zacks Consensus Estimate of $6.22 per share, and showing an increase from $6.15 per share a year ago, indicating a 4.98% earnings surprise [1] Financial Performance - The company achieved revenues of $4.74 billion for the quarter ended December 2024, which was 1.17% below the Zacks Consensus Estimate and a decrease from $4.82 billion in the same quarter last year [2] - Over the last four quarters, Parker-Hannifin has surpassed consensus EPS estimates four times but has only topped consensus revenue estimates once [2] Stock Performance - Parker-Hannifin shares have increased approximately 4.7% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] - The stock's immediate price movement will largely depend on management's commentary during the earnings call [3] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $6.97, with expected revenues of $5.17 billion, and for the current fiscal year, the EPS estimate is $26.73 on revenues of $20.2 billion [7] - The estimate revisions trend for Parker-Hannifin is mixed, resulting in a Zacks Rank 3 (Hold), suggesting the stock is expected to perform in line with the market in the near future [6] Industry Context - The Manufacturing - General Industrial industry, to which Parker-Hannifin belongs, is currently ranked in the bottom 35% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Performance - Fiscal 2025 Q2 sales were $4.74 billion, a decrease of 1.6% year-over-year, with organic sales growth of 0.7% after adjusting for currency and divestitures [3][16]. - Net income for the quarter was $948.6 million, representing a 39% increase compared to the prior year, with diluted EPS of $7.25, also up 39% [3][14]. - Year-to-date cash flow from operations increased by 24% to $1.7 billion, which is 17.4% of sales [3]. - Total net sales for Q2 2024 were $4,742,593,000, a slight decrease of 1.6% from $4,820,947,000 in Q2 2023 [19]. - Adjusted net income attributable to common shareholders for the first half of 2024 was $1,663,017,000, compared to $1,578,816,000 in the same period of 2023, reflecting a 5.3% increase [17]. - Net income for the six months ended December 31, 2024, increased to $1,647,177 thousand from $1,333,129 thousand in 2023, representing a growth of approximately 23.5% [23]. Segment Performance - Aerospace Systems Segment sales grew by 14% to $1.49 billion, with a segment operating margin of 22.7%, up 260 basis points [3][7]. - Aerospace Systems segment sales increased by 14.0% to $1,489,787,000 in Q2 2024 from $1,306,474,000 in Q2 2023 [19]. - The Diversified Industrial Segment in North America reported sales of $1.93 billion, down 8.6% year-over-year, with an organic decline of 5% [5]. - The Diversified Industrial segment operating margin improved to 24.4% in Q2 2024 from 23.7% in Q2 2023 [20]. - The North America businesses operating margin for the six months ended December 31, 2024, was 22.6%, while the adjusted operating margin was 24.9% [30]. - The International businesses operating margin for the six months ended December 31, 2024, was 21.7%, with an adjusted operating margin of 24.1% [30]. Cash Flow and Debt Management - The company reduced debt by $1.1 billion during the quarter, supported by strong cash flow and proceeds from divestitures [2]. - Total assets decreased to $28,271,463,000 as of December 31, 2024, down from $29,297,842,000 as of June 30, 2024 [22]. - Cash and cash equivalents decreased to $395,507,000 from $422,027,000 over the same period [22]. - Long-term debt decreased to $6,667,955,000 from $7,157,034,000, indicating a reduction in leverage [22]. - The company reported net cash provided by operating activities of $1,678,733 thousand for the six months ended December 31, 2024, compared to $1,351,987 thousand in 2023, an increase of about 24.1% [23]. - The company reported a net cash used in financing activities of $2,104,226 thousand for the six months ended December 31, 2024, compared to $1,305,239 thousand in 2023, indicating an increase in cash outflow [23]. Guidance and Forecast - Guidance for fiscal year 2025 anticipates sales growth of -2% to 1%, with organic sales growth projected at approximately 2% [4]. - Forecasted net sales for fiscal year 2025 are expected to range from a decrease of 2% to an increase of 1% [24]. - Adjusted forecasted earnings per diluted share for fiscal year 2025 is projected to be between $26.40 and $27.00, up from the forecasted earnings per diluted share of $24.46 to $25.06 [26]. - The forecasted segment operating margin for fiscal year 2025 is approximately 22.7%, with an adjusted forecasted segment operating margin of around 25.8% [25]. Orders and Market Trends - Order rates increased across all segments, with Aerospace Systems Segment orders accelerating by 9% [8][10]. - North America businesses' net sales for the six months ended December 31, 2024, were $4,028,332 thousand, down from $4,340,109 thousand in 2023, reflecting a decline of approximately 7.2% [27]. - International businesses' net sales for the six months ended December 31, 2024, decreased to $2,680,632 thousand from $2,792,892 thousand in 2023, a decline of about 4.0% [27].

Core Insights - Parker Hannifin Corporation reported strong financial performance for the quarter ended December 31, 2024, with record segment operating margins, earnings per share, and cash flow from operations [1][4][5] - The company reduced its debt by $1.1 billion during the quarter, supported by strong cash flow and proceeds from divestitures [1][4] - The outlook for fiscal year 2025 has been updated, reflecting stronger growth in Aerospace, currency headwinds, and delays in industrial recovery [1][5] Financial Performance - Total sales for the quarter were $4.7 billion, with organic sales growth of 1% [4] - Net income increased by 39% to $949 million, with adjusted net income rising by 6% to $853 million [4][23] - Earnings per share (EPS) rose by 39% to $7.25, with adjusted EPS increasing by 6% to $6.53 [4][24] Segment Results Diversified Industrial Segment - North America sales decreased by 8.6% to $1.93 billion, with an organic growth decline of 5% [2][36] - Segment operating income fell by 7.6% to $427 million, while the operating margin improved by 20 basis points to 22.1% [2][36] - International sales decreased by 5.7% to $1.33 billion, with an organic growth decline of 3% [3][36] Aerospace Systems Segment - Sales increased by 14% to $1.49 billion, with organic growth also at 14% [7][36] - Segment operating income rose by 28.5% to $338 million, and the operating margin improved by 260 basis points to 22.7% [7][36] Cash Flow and Debt Management - Year-to-date cash flow from operations increased by 24% to $1.7 billion, representing 17.4% of sales [4] - The company utilized strong cash generation to significantly reduce debt by $1.1 billion during the quarter [1][4] Order Rates - Overall order rates increased by 5%, with North America businesses showing a 3% increase and Aerospace Systems segment orders rising by 9% [8][15]

Core Viewpoint - Parker-Hannifin Corporation is expected to report its second-quarter fiscal 2025 results on January 30, with a consensus estimate for revenues at $4.8 billion, reflecting a 0.5% decline year-over-year, while earnings are projected at $6.22 per share, indicating a 1.1% increase from the previous year [1][2]. Group 1: Revenue and Earnings Estimates - The Zacks Consensus Estimate for revenues is pegged at $4.8 billion, indicating a decline of 0.5% from the prior-year quarter's number [2]. - The consensus mark for earnings is pinned at $6.22 per share, which has inched up a penny in the past 30 days, indicating an increase of 1.1% from the year-ago quarter's figure [2]. Group 2: Performance Drivers - The Aerospace Systems segment is expected to benefit from persistent strength in commercial and military end markets, with healthy demand in the general aviation market and increased defense spending [4]. - The acquisition of Meggitt is anticipated to enhance the Aerospace Systems segment's results, with quarterly revenues estimated at $1.44 billion, indicating a 10.2% growth from the year-ago number [5]. - The Win Strategy, focusing on innovation and strategic positioning, is expected to aid margins in the fiscal second quarter [6]. Group 3: Challenges and Risks - The Diversified Industrial segment is likely to face challenges due to difficult conditions in the off-highway end market, particularly in construction and agricultural sectors [7]. - The consensus estimate for the Diversified Industrial North America segment's revenues is pinned at $1.96 billion, indicating a 7.1% decline year-over-year, while the international segment's revenues are estimated at $1.37 billion, reflecting a 2.4% decrease [8].

Core Viewpoint - Parker Hannifin Corporation will release its fiscal 2025 second quarter earnings on January 30, 2025, and will hold a conference call to discuss the results and answer questions from investors and analysts [1]. Company Overview - Parker Hannifin is a Fortune 250 global leader in motion and control technologies, with over a century of experience in enabling engineering breakthroughs [2]. - The company has a strong track record of increasing its annual dividend per share for 68 consecutive fiscal years, ranking among the top five longest-running dividend-increase records in the S&P 500 index [2]. Investor Communication - The earnings conference call will take place at 11:00 a.m. Eastern time and will be webcast on Parker's investor website, with an accompanying slide presentation [1]. - The webcast will be archived for replay later on the same day [1].

Have you been searching for a stock that might be well-positioned to maintain its earnings-beat streak in its upcoming report? It is worth considering Parker-Hannifin (PH) , which belongs to the Zacks Manufacturing - General Industrial industry.When looking at the last two reports, this maker of motion and control products has recorded a strong streak of surpassing earnings estimates. The company has topped estimates by 4.90%, on average, in the last two quarters.For the last reported quarter, Parker-Hannif ...

Company Overview - Parker-Hannifin Corporation (NYSE: PH) is a leader in motion and control technologies, serving a broad range of industries with an impressive portfolio of products [1] - The company specializes in manufacturing components used in diverse industrial applications and products [1] Analyst Background - The analyst has a background in both equity and real estate markets, with a focus on identifying long-only opportunities that offer safe and growing dividends [1] - The analyst has extensive experience in real estate investment, having successfully sourced over $100 million in commercial real estate investments [1] - The analyst's emphasis on correlation across asset classes and sectors, combined with a background in economics, enables the provision of timely analyses and strategies for investors [1] Disclosure - The analyst has a beneficial long position in Parker-Hannifin Corporation (PH) through stock ownership, options, or other derivatives [1] - The article expresses the analyst's own opinions and is not influenced by any compensation or business relationships with the mentioned companies [1]

Parker-Hannifin (NYSE: PH ) is a large cap company with a market capitalization of $82 billion operating in the industrial machinery and supplies and components industry. It attracts investors who seek solid, medium to long-term alternatives with a defensive profile. The company hasMr. Mavroudis is a professional portfolio manager specializing in institutional and private portfolios. He focuses on risk management, which is accompanied by in-depth financial market analysis (fundamental, macro and technical) ...

Core Insights - Parker-Hannifin Corporation (PH) is experiencing growth in its Aerospace Systems segment, with organic revenues increasing by 17.2% year over year in Q1 of fiscal 2025 [1] - The company anticipates a 10% increase in organic sales for the Aerospace Systems segment in fiscal 2025 [2] - PH is focusing on acquisitions to strengthen its business, notably acquiring Meggitt, which contributed to a 2.6% sales boost in fiscal 2024 [3] Financial Performance - The company divested non-profitable businesses, including a composites and fuel containment business for $560 million and a filtration business for $66 million, to focus on its core Aerospace business [4] - In fiscal 2024, PH rewarded shareholders with $782 million in dividends, an 11% increase year over year, and raised its quarterly dividend rate by 10% in April 2024 [5] - PH's shares have increased by 20.9% over the past three months, outperforming the industry growth of 13.5% [6] Challenges - The Diversified Industrial segment is facing difficulties, with organic sales declining by 4.5% year over year in Q1 of fiscal 2025 due to challenging conditions in off-highway and transportation markets [6] - The company's liquidity position is concerning, with cash and cash equivalents at $371.1 million compared to short-term debt of approximately $3.5 billion [7]

[PART I - FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [ITEM 1. FINANCIAL STATEMENTS](index=2&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Parker-Hannifin's unaudited consolidated financial statements for Q1 FY2025 and Q1 FY2024, detailing income, comprehensive income, balance sheet, cash flows, and notes [Consolidated Statement of Income](index=2&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20INCOME) Net income attributable to common shareholders increased for the three months ended September 30, 2024, driven by higher net sales and improved basic EPS | Metric | Three Months Ended Sep 30, 2024 ($ thousands) | Three Months Ended Sep 30, 2023 ($ thousands) | | :----------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net sales | 4,903,984 | 4,847,488 | | Income before income taxes | 875,186 | 820,435 | | Net income | 698,528 | 651,072 | | Net income attributable to common shareholders | 698,420 | 650,827 | | Basic Earnings per share | $5.43 | $5.07 | [Consolidated Statement of Comprehensive Income](index=3&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20COMPREHENSIVE%20INCOME) Total comprehensive income attributable to common shareholders significantly increased in Q1 FY2025, primarily due to a positive foreign currency translation adjustment | Metric | Three Months Ended Sep 30, 2024 ($ thousands) | Three Months Ended Sep 30, 2023 ($ thousands) | | :------------------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net income attributable to common shareholders | 698,420 | 650,827 | | Foreign currency translation adjustment | 344,546 | (222,532) | | Retirement benefits plan activity | 3,451 | 818 | | Other comprehensive income (loss) | 347,997 | (221,714) | | Total comprehensive income attributable to common shareholders | $1,045,997 | $428,752 | [Consolidated Balance Sheet](index=4&type=section&id=CONSOLIDATED%20BALANCE%20SHEET) Total assets and total equity increased as of September 30, 2024, compared to June 30, 2024, with notable changes in current assets, goodwill, and retained earnings | Metric | September 30, 2024 ($ thousands) | June 30, 2024 ($ thousands) | | :----------------------------------- | :------------------------------- | :-------------------------- | | Total current assets | 7,033,701 | 6,798,624 | | Total assets | 29,600,835 | 29,297,842 | | Total current liabilities | 7,338,030 | 7,313,309 | | Total liabilities | 16,699,486 | 17,216,949 | | Total equity | 12,901,349 | 12,080,893 | [Consolidated Statement of Cash Flows](index=5&type=section&id=CONSOLIDATED%20STATEMENT%20OF%20CASH%20FLOWS) Operating activities generated significantly more cash in Q1 FY2025, while cash used in investing and financing activities also increased, resulting in a net decrease in cash and cash equivalents | Cash Flow Activity | Three Months Ended Sep 30, 2024 ($ thousands) | Three Months Ended Sep 30, 2023 ($ thousands) | | :--------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net cash provided by operating activities | 743,975 | 649,959 | | Net cash used in investing activities | (86,608) | (55,994) | | Net cash used in financing activities | (710,955) | (617,862) | | Net decrease in cash and cash equivalents | (50,959) | (26,256) | | Cash and cash equivalents at end of period | $371,068 | $448,926 | [Notes to Consolidated Financial Statements](index=6&type=section&id=NOTES%20TO%20CONSOLIDATED%20FINANCIAL%20STATEMENTS) These notes provide detailed explanations and disclosures supporting the consolidated financial statements, covering accounting policies, significant transactions, and financial instrument disclosures [1. Management representation & Subsequent Events](index=6&type=section&id=1.%20Management%20representation) Management affirms the fair presentation of the unaudited consolidated financial statements and discloses two divestitures completed subsequent to the quarter end - Management confirms the fair presentation of the unaudited consolidated financial statements for the three months ended September 30, 2024, including all normal recurring adjustments[16](index=16&type=chunk) - On November 1, 2024, Parker completed two divestitures: the CFC business for **$560 million** and a non-core filtration business for **$66 million**[17](index=17&type=chunk) [2. New accounting pronouncements](index=6&type=section&id=2.%20New%20accounting%20pronouncements) The Company is evaluating new FASB ASUs on income tax disclosures and segment reporting, with the segment reporting standard planned for adoption in fiscal 2025 - FASB issued ASU 2023-09, 'Income Taxes (Topic 740): Improvements to Income Tax Disclosures,' effective for fiscal years beginning after December 15, 2024, with the Company evaluating its impact[18](index=18&type=chunk) - FASB issued ASU 2023-07, 'Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures,' effective for fiscal years beginning after December 15, 2023, which the Company plans to adopt in fiscal 2025, expecting expanded disclosure with no financial impact[19](index=19&type=chunk) - The Company adopted ASU 2022-04, 'Liabilities—Supplier Finance Programs,' on July 1, 2023, with no material impact on condensed consolidated financial statements[20](index=20&type=chunk) [3. Revenue recognition](index=7&type=section&id=3.%20Revenue%20recognition) Revenue is primarily generated from product sales in various industrial and aerospace markets, with most recognized at a point in time, and North America remaining the largest geographic contributor - Revenue is primarily derived from product sales in aerospace and defense, in-plant and industrial equipment, transportation, off-highway, energy, and HVAC and refrigeration markets, with most recognized at a point in time[22](index=22&type=chunk) | Segment / Region | Three Months Ended Sep 30, 2024 ($ thousands) | Three Months Ended Sep 30, 2023 ($ thousands) | | :----------------- | :-------------------------------------------- | :-------------------------------------------- | | **Diversified Industrial Segment revenues by technology platform:** | | | | Motion Systems | 848,549 | 942,314 | | Flow and Process Control | 1,125,634 | 1,181,461 | | Filtration and Engineered Materials | 1,481,975 | 1,494,753 | | Total DI Segment | $3,456,158 | $3,618,528 | | **Aerospace Systems Segment revenues by market segment:** | | | | Commercial OEM | 433,235 | 418,616 | | Commercial aftermarket | 520,829 | 391,206 | | Defense OEM | 262,291 | 263,065 | | Defense aftermarket | 231,471 | 156,073 | | Total AS Segment | $1,447,826 | $1,228,960 | | **Total Company revenues by geographic region:** | | | | North America | 3,333,660 | 3,293,091 | | Europe | 934,580 | 941,715 | | Asia Pacific | 579,911 | 554,405 | | Latin America | 55,833 | 58,277 | | Total Company | $4,903,984 | $4,847,488 | - Net contract liabilities decreased to **$(99,561) thousand** at September 30, 2024, from **$(103,948) thousand** at June 30, 2024, primarily due to timing differences between revenue recognition and advance payment receipts[28](index=28&type=chunk) - Backlog at September 30, 2024, was **$11.0 billion**, with approximately **73%** expected to be recognized as revenue within the next 12 months[29](index=29&type=chunk) [4. Divestitures](index=8&type=section&id=4.%20Divestitures) The Company signed an agreement to divest its CFC business, which closed on November 1, 2024, and previously divested the MicroStrain sensing systems business in September 2023 - On July 28, 2024, the Company signed an agreement to divest its CFC business (from Meggitt acquisition), which closed on November 1, 2024, with assets held for sale at **$356 million** and liabilities at **$65 million** as of September 30, 2024[30](index=30&type=chunk) - In September 2023, the MicroStrain sensing systems business was divested for **$37 million**, yielding a **$13 million** pre-tax gain[30](index=30&type=chunk) [5. Earnings per share](index=8&type=section&id=5.%20Earnings%20per%20share) Basic and diluted earnings per