Key Takeaways PH beat Q2 estimates as earnings jumped 17% and sales rose 9.1% on strong organic growth.Parker-Hannifin's Aerospace Systems sales surged 14.5%, supported by OEM growth and aftermarket strength.PH raised its fiscal 2026 sales and earnings outlook, citing higher margins and solid order momentum.Parker-Hannifin Corporation (PH) reported second-quarter fiscal 2026 (ended December 2025) adjusted earnings (excluding $1.05 from non-recurring items) of $7.65 per share, which beat the Zacks Consensus ...

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Financial Data and Key Metrics Changes - The company achieved record Q2 sales of $5.2 billion, with organic growth of 6.6% and a 150 basis points margin expansion, resulting in a 27.1% adjusted segment operating margin [4][10] - Adjusted earnings per share (EPS) grew 17% to $7.65, with cash flow from operations at $1.6 billion [4][11] - Net income reached $980 million, reflecting an 18.9% return on sales [10] Business Line Data and Key Metrics Changes - North America sales were approximately $2 billion, with organic growth of 2.5% driven by strength in off-highway and aerospace and defense verticals [14] - International sales increased to a record $1.5 billion, up 12% year-over-year, with organic growth of 4.6% [15] - Aerospace sales reached a record $1.7 billion, up 14.5% year-over-year, with an adjusted segment operating margin of 30.2% [16] Market Data and Key Metrics Changes - Orders increased by 9% year-over-year, with a backlog reaching a record $11.7 billion [12][14] - In Asia-Pacific, organic growth was the strongest at +9%, while Europe turned positive at +2% [15] - Latin America saw a slight decline of 3% year-over-year [15] Company Strategy and Development Direction - The company announced the acquisition of Filtration Group Corporation, which is expected to create one of the largest global industrial filtration businesses and achieve approximately $220 million in cost synergies [8][9] - The company is focused on interconnected technologies that provide efficient solutions across market verticals, with two-thirds of revenue coming from customers who buy four or more technologies [6][7] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering another record fiscal year in 2026, with strong orders and positive growth across all reported businesses [12][19] - The company is increasing its full-year guidance for organic sales growth to 4%-6% and adjusted EPS to $30.70 at the midpoint, reflecting a 12.3% increase [22][24] Other Important Information - The company achieved top quartile safety performance with an 8% reduction in recordable incident rate [4] - The company remains committed to free cash flow conversion of greater than 100% for the year [17] Q&A Session Summary Question: Positive organic growth across technology platforms - Management noted that positive organic growth was seen across all three technology platforms, attributing it to both specific company performance and broader market cycles [28][30] Question: Filtration Group acquisition timing - Management believes the acquisition timing is favorable, as Filtration Group has seen positive growth, indicating potential for increased sales post-acquisition [32][33] Question: Regional performance outlook - Management provided insights on regional performance, indicating strong growth in North America and Asia-Pacific, while Europe showed signs of recovery [39][41] Question: Pricing and cost management - Management emphasized strong pricing strategies and cost management practices to mitigate inflation impacts on margins [72][74] Question: Fourth quarter performance expectations - Management reassured that the fourth quarter is expected to be the strongest of the year, with no specific concerns noted [96][97]

Financial Data and Key Metrics Changes - The company achieved record Q2 sales of $5.2 billion, with organic growth of 6.6% and a 150 basis points margin expansion, resulting in a 27.1% adjusted segment operating margin [4][10] - Adjusted earnings per share (EPS) grew 17% to $7.65, with cash flow from operations at $1.6 billion [5][12] - Net income reached $980 million, reflecting an 18.9% return on sales [10] Business Line Data and Key Metrics Changes - North America sales were approximately $2 billion, with organic growth of 2.5% driven by strength in off-highway and aerospace and defense verticals [14] - International sales increased to a record $1.5 billion, up 12% year-over-year, with organic growth of 4.6% [15] - Aerospace sales reached a record $1.7 billion, up 14.5% year-over-year, with an adjusted segment operating margin of 30.2% [16] Market Data and Key Metrics Changes - Orders increased by 9% year-over-year, with a backlog reaching a record $11.7 billion [12][14] - In Asia-Pacific, organic growth was the strongest at +9%, while Europe turned positive at +2% [15] - Latin America saw a slight decline of 3% year-over-year [15] Company Strategy and Development Direction - The company is focused on interconnected technologies that provide efficient solutions across market verticals, with a strong emphasis on the off-highway market [6][7] - The acquisition of Filtration Group Corporation is expected to enhance the company's presence in life sciences, HVAC, and industrial markets, with anticipated cost synergies of approximately $220 million [8][9] - The company aims to continue its investment in high-quality businesses to transform its portfolio and drive shareholder value [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering another record fiscal year in 2026, citing strong orders and positive growth across various segments [12][20] - The company is increasing its organic sales growth guidance from 4%-5% to 5% at the midpoint, reflecting positive trends in aerospace and off-highway markets [20][22] - Management noted that while some markets are recovering, challenges remain in transportation and upstream oil and gas sectors [20][41] Other Important Information - The company reported a favorable currency impact of 2% and a 1.5% contribution from acquisitions [10] - Corporate G&A expenses are expected to remain unchanged at $200 million, with interest expense slightly adjusted down to $415 million [23] Q&A Session Summary Question: Insights on technology platforms within Diversified Industrial - Management noted positive organic growth across all three technology platforms, attributing it to both company-specific factors and broader market cycles [29][31] Question: Regional performance outlook - Management highlighted strong growth in North America, particularly in industrial and aerospace sectors, while noting challenges in transportation [40][41] Question: Pricing and cost management amid inflation - Management confirmed strong pricing power and ongoing efforts to mitigate inflation impacts on EPS [73][75] Question: Filtration Group acquisition timing and hurdles - Management indicated that standard regulatory filings are the primary hurdles for the acquisition process [76] Question: Long-term growth outlook for in-plant equipment in the U.S. - Management emphasized gradual recovery driven by productivity and automation projects, with no single catalyst identified for a rapid turnaround [65][66] Question: Aerospace business margin expectations - Management clarified that while margins are expected to step down in H2, they remain confident in robust activity and overall margin improvement [68]

Financial Data and Key Metrics Changes - The company achieved record Q2 sales of $5.2 billion, with organic growth of 6.6% and a 150 basis points margin expansion, resulting in a 27.1% adjusted segment operating margin [4][10] - Adjusted earnings per share (EPS) grew 17% to $7.65, with net income reaching $980 million, reflecting an 18.9% return on sales [10][11] - Cash flow from operations was $1.6 billion, representing 16% of sales, while free cash flow was $1.5 billion, or 14.2% of sales [17] Business Line Data and Key Metrics Changes - North America sales were approximately $2 billion, with organic growth of 2.5%, driven by strength in off-highway and aerospace and defense verticals [13] - International sales reached a record $1.5 billion, up 12% year-over-year, with organic growth of 4.6% [15] - Aerospace sales were a record $1.7 billion, up 14.5% year-over-year, with an adjusted segment operating margin of 30.2% [16] Market Data and Key Metrics Changes - Orders in North America increased by 7% compared to the prior year, with a backlog reaching a record $11.7 billion [12][13] - International orders improved by 6%, with positive orders in both Europe and Asia-Pacific [15] - The aerospace segment saw a 14% increase in backlog, reaching a record $8 billion [16] Company Strategy and Development Direction - The company is focused on interconnected technologies that provide efficient solutions across market verticals, with a strong emphasis on the off-highway market [5][6] - The acquisition of Filtration Group Corporation is expected to enhance the company's presence in life sciences, HVAC, and industrial markets, with anticipated cost synergies of approximately $220 million [8][9] - The company aims to maintain a disciplined acquisition strategy that is accretive to organic growth and improves profitability [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in delivering another record fiscal year in 2026, supported by strong orders and positive growth across various segments [11][19] - The company noted that while some markets are recovering, challenges remain in transportation and upstream oil and gas sectors [40][41] - Management highlighted the importance of productivity and automation projects over large capacity expansions, indicating a gradual recovery in the industrial sector [125] Other Important Information - The company is increasing its full-year guidance for organic sales growth to a range of 4%-6%, with specific increases in aerospace and diversified industrial segments [21][22] - Adjusted segment operating margins guidance has been raised to 27.2% for the full year, reflecting an increase of 110 basis points from the prior year [23] Q&A Session Summary Question: Positive organic growth across technology platforms - Management acknowledged the positive organic growth across all three technology platforms and attributed it to both company-specific factors and broader market cycles [30][31] Question: Outlook for international growth and regional dynamics - Management provided insights on regional growth, indicating a positive outlook for North America and Asia-Pacific, while Europe showed signs of recovery [39][42] Question: Pricing and cost management amid inflation - Management confirmed strong pricing power and ongoing efforts to manage costs effectively, ensuring that inflation does not impact EPS [74][75] Question: Filtration Group acquisition timing and hurdles - Management indicated that standard regulatory filings are the primary hurdles for the Filtration Group acquisition, with an expected closing timeline of 6-12 months [76] Question: In-plant equipment spending trends - Management noted that customers are prioritizing productivity and automation projects, which benefits the company, while capacity expansion remains gradual [125]

PARKER HANNIFIN CORPORATION Fiscal 2026 Second Quarter Earnings Presentation January 29, 2026 Forward-Looking Statements and Non-GAAP Financial Measures Forward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. Often but not always, these statements may be identified from the use of forward-looking terminology such as "anticipates," "bel ...

分组1 - Parker-Hannifin reported quarterly earnings of $7.65 per share, exceeding the Zacks Consensus Estimate of $7.15 per share, and up from $6.53 per share a year ago, representing an earnings surprise of +6.93% [1] - The company achieved revenues of $5.17 billion for the quarter ended December 2025, surpassing the Zacks Consensus Estimate by 2.59%, compared to $4.74 billion in the same quarter last year [2] - Parker-Hannifin has outperformed the S&P 500 with a share price increase of about 4.2% since the beginning of the year, while the S&P 500 gained 1.9% [3] 分组2 - The current consensus EPS estimate for the upcoming quarter is $7.71 on revenues of $5.33 billion, and for the current fiscal year, it is $30.41 on revenues of $21.03 billion [7] - The Zacks Industry Rank for Manufacturing - General Industrial is in the top 33% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] - The estimate revisions trend for Parker-Hannifin was favorable ahead of the earnings release, resulting in a Zacks Rank 2 (Buy) for the stock, suggesting expected outperformance in the near future [6]

Financial Performance - Record sales of $5.2 billion for the fiscal year ending June 30, 2026, representing a 9% increase year-over-year, with organic sales growth of 6.6%[3] - Adjusted earnings per share (EPS) increased by 17% to a record $7.65, while reported EPS decreased by 9% to $6.60 due to a one-time gain from divestitures in the prior year[3] - Adjusted net income rose by 15% to $980 million, while net income decreased by 11% to $845 million compared to the same quarter last year[3] - Total net income for Parker Hannifin Corporation was $845 million in Q4 2025, with diluted EPS of $6.60, compared to $949 million and $7.25 in Q4 2024[22] - Net income for the six months ended December 31, 2025, was $1,653 million, slightly up from $1,647 million in 2024, indicating a growth of 0.4%[26] Segment Performance - Segment operating margin improved to 23.9%, an increase of 180 basis points, with adjusted segment operating margin rising to 27.1%, an increase of 150 basis points[3] - Aerospace Systems Segment achieved record sales of $1.706 billion, a 14.5% increase, driven by 26% growth in commercial OEM and 17% in aftermarket[7] - International businesses reported sales of $1.482 billion, an 11.8% increase, with a segment operating margin of 23.5%, up 210 basis points[6] - Net sales for the Diversified Industrial Segment reached $3,468 million in Q4 2025, a 6.6% increase from $3,253 million in Q4 2024[20] - Adjusted segment operating income for the same segment was $889 million, up from $793 million year-over-year, reflecting a 12.1% increase[20] - Reported sales growth for the Aerospace segment was 11.8% in Q4 2025, with net sales of $1,482 million compared to $1,325 million in Q4 2024[20] - The adjusted segment operating margin for the Diversified Industrial Segment improved to 25.6% in Q4 2025 from 24.4% in Q4 2024[20] - The Aerospace segment's organic sales growth was 4.6% in Q4 2025, compared to 13.5% in Q4 2024[20] Guidance and Forecast - Guidance for fiscal year 2026 has been increased, with sales growth projected between 5.5% to 7.5% and adjusted EPS guidance raised to a range of $30.40 to $31.00[4] - The forecasted net sales growth for Fiscal Year 2026 is projected to be between 5.5% and 7.5%, with adjustments for currency and acquisitions reducing organic growth to 4.0% to 6.0%[27] - The forecasted segment operating margin for Fiscal Year 2026 is estimated to be between 23.7% and 24.1%, with adjusted margins expected to rise to 27.0% to 27.4% after accounting for various charges[28] - Forecasted earnings per diluted share for Fiscal Year 2026 are projected to be between $26.26 and $26.86, with adjusted earnings expected to range from $30.40 to $31.00 after considering specific adjustments[29] Cash Flow and Investments - Net cash provided by operating activities for the six months ended December 31, 2025, was $1,644 million, a decrease from $1,679 million in 2024[26] - Cash used in investing activities totaled $(1,146) million, significantly down from a net cash provided of $412 million in the previous year[26] - Payments for common shares amounted to $(667) million, compared to $(192) million in the prior year, indicating an increase in share repurchase activity[26] - The company reported a net decrease in cash and cash equivalents of $40 million, ending the period with $427 million in cash[26] - The company made acquisitions totaling $(1,013) million during the period, reflecting a strategic move towards growth through consolidation[26] - The effect of exchange rate changes on cash was a decrease of $(9) million, contributing to the overall cash flow dynamics[26] Orders and Backlog - Order rates increased by 9% across all reported businesses, with a record backlog of $11.7 billion[10] - Strong performance in Asia with 9% organic growth, and EMEA returning to positive growth at 2%[6]

Core Insights - Parker Hannifin Corporation reported record sales of $5.2 billion for the quarter ended December 31, 2025, with an organic sales growth of 6.6% and a segment operating margin increase of 180 basis points [4][2] - The company achieved a 17% growth in adjusted earnings per share (EPS), reaching a record $7.65, despite a decrease in net income due to a prior year one-time gain from divestitures [4][2] - The outlook for fiscal year 2026 has been increased, with reported sales growth projected between 5.5% to 7.5% and adjusted EPS guidance raised to a range of $30.40 to $31.00 [5][2] Financial Performance - Net sales increased by 9% to $5.2 billion, with adjusted segment operating margin at 23.9%, an increase of 180 basis points [4][2] - Adjusted net income rose by 15% to $980 million, while net income decreased by 11% to $845 million compared to the same quarter last year [4][2] - The company reported an adjusted segment operating income of $889 million, with a margin of 25.4% [4][2] Segment Analysis - The Diversified Industrial Segment in North America reported sales of $1.986 billion, a 3% increase, with an adjusted segment operating margin of 25.4% [3][4] - International businesses saw a sales increase of 11.8% to $1.482 billion, with an adjusted segment operating margin of 26.0% [7][4] - The Aerospace Systems Segment achieved sales of $1.706 billion, a 14.5% increase, with a segment operating margin of 26.0% [8][4] Order Rates and Backlog - Order rates increased by 9%, with the Aerospace Systems Segment experiencing a 14% increase in orders [9][12] - The company reported a robust backlog of $11.7 billion, indicating strong future demand [14][13] - The backlog in the aerospace and defense sector contributed significantly to the overall order growth [12][13] Strategic Initiatives - Parker Hannifin announced a definitive agreement to acquire Filtration Group Corporation, which will enhance its aftermarket business and expand its presence in life sciences and HVAC/R markets [2][4] - The company continues to focus on organic growth driven by sectors such as in-plant & industrial, off-highway, and aerospace & defense [6][12]

Core Insights - Parker-Hannifin Corporation (PH) is expected to report second-quarter fiscal 2026 results on January 29, with revenue estimates at $5.04 billion, reflecting a 6.3% increase year-over-year, and earnings per share projected at $7.15, indicating a 9.5% rise from the previous year [1][10] Group 1: Earnings Performance - The company has a strong earnings surprise history, having exceeded the Zacks Consensus Estimate in the last four quarters, with an average surprise of 6.2% [2] - The Aerospace Systems segment is anticipated to benefit from robust demand in both commercial and military markets, with quarterly revenues estimated at $1.67 billion, representing an 11.9% growth from the prior year [3][4] Group 2: Segment Performance - The Diversified Industrial segment's North America revenues are expected to reach $1.96 billion, showing a 1.7% year-over-year growth, while the International segment is projected at $1.44 billion, indicating an 8.5% increase [6] - Strong demand in various markets, including in-plant and industrial equipment, refrigeration, HVAC, and aerospace & defense, is likely to drive the North America business [5] Group 3: Strategic Developments - The acquisition of Curtis Instruments in September 2025 is expected to enhance Parker-Hannifin's industrial electrification portfolio and positively impact top-line results [7] - The company's margins are projected to benefit from its Win Strategy, which focuses on innovation and strategic positioning for sustainable growth [8]