FY25 Performance Highlights - Parker Hannifin achieved record sales of $199 billion, with organic sales growth of 1%[6] - The company's adjusted segment operating margin reached a record 261%, a 120 basis points increase[6] - Adjusted EBITDA margin also hit a record of 264%, up by 80 basis points[6] - Adjusted EPS growth was 7%[6] - Cash flow from operations reached a record $38 billion, a 12% increase[6] Q4 FY25 Financial Summary - Reported sales were $5243 million, a 1% increase compared to Q4 FY24[29] - Segment operating margin was 239%, adjusted to 269%, a 160 basis points increase year-over-year[29] - Net income was $923 million, adjusted to $992 million, a 12% increase[29] - EPS was $715, adjusted to $769, a 14% increase[29] FY26 Guidance - The company forecasts organic sales growth of approximately 3%[39] - Adjusted EPS is projected to be between $2840 and $2940[41] - Free cash flow is expected to be between $30 billion and $34 billion[41]

Core Viewpoint - Parker-Hannifin reported quarterly earnings of $7.69 per share, exceeding the Zacks Consensus Estimate of $7.08 per share, and showing an increase from $6.77 per share a year ago, representing an earnings surprise of +8.62% [1][2] Financial Performance - The company posted revenues of $5.24 billion for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.73%, and showing a slight increase from $5.19 billion year-over-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 9.6% since the beginning of the year, outperforming the S&P 500's gain of 7.9% [3] - The current Zacks Rank for Parker-Hannifin is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $6.94 on revenues of $4.97 billion, and for the current fiscal year, it is $29.10 on revenues of $20.67 billion [7] - The trend of earnings estimate revisions is mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Manufacturing - General Industrial industry, to which Parker-Hannifin belongs, is currently ranked in the top 14% of over 250 Zacks industries, indicating a favorable outlook [8]

[Fiscal 2025 Performance Highlights & Outlook](index=1&type=section&id=Fiscal%202025%20Performance%20Highlights%20%26%20Outlook) The company reported record fiscal 2025 results driven by strong margin expansion and provided a positive outlook for fiscal 2026 [Fiscal 2025 Fourth Quarter Highlights](index=1&type=section&id=Fiscal%202025%20Fourth%20Quarter%20Highlights) The company achieved record Q4 sales, net income, and EPS, with significant margin improvement and strategic capital deployment | Metric | FY25 Q4 (Reported) | Change YoY | FY25 Q4 (Adjusted) | Change YoY | | :------------------------- | :----------------- | :--------- | :----------------- | :--------- | | Sales | $5.2 billion | 2% organic | - | - | | Net Income | $923 million | 18% | $992 million | 12% | | EPS | $7.15 | 19% | $7.69 | 14% | | Segment Operating Margin | 23.9% | +170 bps | 26.9% | +160 bps | - Repurchased **$851 million** of shares[5](index=5&type=chunk) - Announced an agreement to acquire Curtis Instruments, Inc, expanding its electrification offering[5](index=5&type=chunk) [Fiscal 2025 Full Year Highlights](index=1&type=section&id=Fiscal%202025%20Full%20Year%20Highlights) The company achieved record full-year performance in net income, EPS, and operating margins, generating substantial cash flow | Metric | FY25 (Reported) | Change YoY | FY25 (Adjusted) | Change YoY | | :------------------------- | :-------------- | :--------- | :-------------- | :--------- | | Sales | $19.9 billion | 1% organic | - | - | | Net Income | $3.5 billion | 24% | $3.6 billion | 7% | | EPS | $27.12 | 24% | $27.33 | 7% | | EBITDA Margin | 27.3% | +210 bps | 26.4% | +80 bps | | Segment Operating Margin | 23.0% | +150 bps | 26.1% | +120 bps | - Cash flow from operations **increased 12% to $3.8 billion**, representing 19.0% of sales[5](index=5&type=chunk) - Repurchased **$1.6 billion** of shares[5](index=5&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO attributed record fiscal 2025 performance to 'The Win Strategy™' and anticipates continued growth in fiscal 2026 - Achieved a record year for safety, engagement, earnings per share, margins, and cash flow[3](index=3&type=chunk) - Generated full year cash flow of **$3.8 billion** and increased the quarterly cash dividend by **10 percent**[3](index=3&type=chunk) - Forecasts Aerospace to remain the fastest-growing business and a return to positive organic growth in Industrial businesses for fiscal year 2026[4](index=4&type=chunk) [Fiscal 2026 Outlook](index=1&type=section&id=Fiscal%202026%20Outlook) The company projects continued sales growth and strong margins for fiscal year 2026, with adjusted EPS expected to reach $28.40 to $29.40 | Metric | FY26 Guidance (Reported) | FY26 Guidance (Adjusted) | | :----------------------------------- | :----------------------- | :----------------------- | | Sales Growth | 2% to 5% | ~3% organic (midpoint) | | Total Segment Operating Margin | 23.3% to 23.7% | 26.3% to 26.7% | | EPS | $24.68 to $25.68 | $28.40 to $29.40 | - Forecasted sales growth includes previously completed divestitures of 1% and favorable currency of 1.5%[6](index=6&type=chunk) [Segment Performance Analysis](index=3&type=section&id=Segment%20Performance%20Analysis) This section details the performance of the Diversified Industrial and Aerospace Systems segments, including sales, operating income, and order rates [Diversified Industrial Segment](index=3&type=section&id=Diversified%20Industrial%20Segment) The Diversified Industrial segment saw mixed results, with declining sales in North America but growth and record margins in International businesses [North America Businesses](index=3&type=section&id=North%20America%20Businesses) North American operations experienced a sales decline but achieved a significant improvement in operating margin | Metric | FY25 Q4 | FY24 Q4 | Change | Organic Growth | | :----------------------- | :----------- | :----------- | :--------- | :------------- | | Sales | $2,075 million | $2,229 million | -6.9% | -1.4% | | Segment Operating Income | $513 million | $505 million | +1.6% | - | | Segment Operating Margin | 24.7% | 22.7% | +200 bps | - | | Adjusted Segment Operating Margin | 26.7% | 25.0% | +170 bps | - | [International Businesses](index=3&type=section&id=International%20Businesses) International businesses delivered sales growth and a record adjusted operating margin, driven by strength in APAC and Latin America | Metric | FY25 Q4 | FY24 Q4 | Change | Organic Growth | | :----------------------- | :----------- | :----------- | :--------- | :------------- | | Sales | $1,492 million | $1,430 million | +4.3% | +0.6% | | Segment Operating Income | $334 million | $312 million | +7.1% | - | | Segment Operating Margin | 22.4% | 21.8% | +60 bps | - | | Adjusted Segment Operating Margin | 24.7% | 23.9% | +80 bps | - | - Achieved **record adjusted segment operating margin**[8](index=8&type=chunk) - Organic growth turned positive in the quarter with **6% in APAC** and **4% in Latin America**, while EMEA was (3%)[8](index=8&type=chunk) [Aerospace Systems Segment](index=3&type=section&id=Aerospace%20Systems%20Segment) The Aerospace Systems segment delivered strong performance with record sales, margins, and a backlog of $7.4 billion | Metric | FY25 Q4 | FY24 Q4 | Change | Organic Growth | | :----------------------- | :----------- | :----------- | :--------- | :------------- | | Sales | $1,676 million | $1,528 million | +9.7% | +8.6% | | Segment Operating Income | $407 million | $332 million | +22.6% | - | | Segment Operating Margin | 24.3% | 21.7% | +260 bps | - | | Adjusted Segment Operating Margin | 29.0% | 27.1% | +190 bps | - | - Achieved **record sales** on continued aftermarket strength[9](index=9&type=chunk) - Aerospace backlog increased to a **record $7.4 billion**[9](index=9&type=chunk) [Order Rates](index=3&type=section&id=Order%20Rates) Overall company order rates increased by 5%, led by a 12% surge in the Aerospace Systems segment | Segment | FY25 Q4 Order Rate | | :---------------------------------------- | :----------------- | | Parker (Total) | +5% | | Diversified Industrial Segment - North America Businesses | +2% | | Diversified Industrial Segment - International Businesses | 0% | | Aerospace Systems Segment | +12% | - Parker order rates remain strong at **5%**, reflecting a transformed portfolio[10](index=10&type=chunk) - Aerospace order rates were **up 12%**, driven by continued strength in both commercial and defense[11](index=11&type=chunk) [Consolidated Financial Statements](index=5&type=section&id=Consolidated%20Financial%20Statements) This section presents the company's consolidated statements of income, balance sheet, and cash flows for fiscal year 2025 [Consolidated Statement of Income](index=5&type=section&id=Consolidated%20Statement%20of%20Income) Net income and diluted EPS increased for both the fourth quarter and full fiscal year 2025, reflecting improved profitability | Metric | Q4 FY25 ($M) | Q4 FY24 ($M) | FY25 ($M) | FY24 ($M) | | :-------------------------------------- | :----------- | :----------- | :----------- | :----------- | | Net sales | 5,243 | 5,187 | 19,850 | 19,930 | | Income before income taxes | 1,071 | 986 | 4,107 | 3,595 | | Net income | 923 | 785 | 3,532 | 2,845 | | Diluted EPS | $7.15 | $6.01 | $27.12 | $21.84 | | Cash dividends per common share | $1.80 | $1.63 | $6.69 | $6.07 | [Business Segment Sales and Operating Income](index=5&type=section&id=Business%20Segment%20Sales%20and%20Operating%20Income) The Aerospace Systems segment drove growth in Q4 and FY25, offsetting a slight decline in the Diversified Industrial segment | Segment | Q4 FY25 Sales ($M) | Q4 FY24 Sales ($M) | FY25 Sales ($M) | FY24 Sales ($M) | | :------------------------ | :----------------- | :----------------- | :-------------- | :-------------- | | Diversified Industrial | 3,567 | 3,659 | 13,665 | 14,458 | | Aerospace Systems | 1,676 | 1,528 | 6,185 | 5,472 | | **Total Net Sales** | **5,243** | **5,187** | **19,850** | **19,930** | | | | | | | | Segment | Q4 FY25 Op. Income ($M) | Q4 FY24 Op. Income ($M) | FY25 Op. Income ($M) | FY24 Op. Income ($M) | | :------------------------ | :-------------------- | :-------------------- | :------------------- | :------------------- | | Diversified Industrial | 847 | 817 | 3,120 | 3,176 | | Aerospace Systems | 407 | 332 | 1,441 | 1,111 | | **Total Segment Op. Income** | **1,254** | **1,149** | **4,561** | **4,287** | [Consolidated Balance Sheet](index=8&type=section&id=Consolidated%20Balance%20Sheet) Total assets increased slightly as of June 30, 2025, while a reduction in debt contributed to a significant increase in shareholders' equity | Metric | June 30, 2025 ($M) | June 30, 2024 ($M) | | :-------------------------------------- | :----------------- | :----------------- | | Total assets | 29,494 | 29,298 | | Cash and cash equivalents | 467 | 422 | | Total current assets | 6,950 | 6,799 | | Goodwill | 10,694 | 10,507 | | Notes payable and long-term debt payable within one year | 1,791 | 3,403 | | Total current liabilities | 5,819 | 7,313 | | Long-term debt | 7,494 | 7,157 | | Shareholders' equity | 13,682 | 12,072 | [Consolidated Statement of Cash Flows](index=9&type=section&id=Consolidated%20Statement%20of%20Cash%20Flows) The company generated significantly higher cash from operations in FY25, driven by strong earnings and effective working capital management | Cash Flow Activity | FY25 ($M) | FY24 ($M) | | :-------------------------------------- | :-------- | :-------- | | Net cash provided by operating activities | 3,776 | 3,384 | | Net cash provided by (used in) investing activities | 224 | (298) | | Net cash used in financing activities | (3,977) | (3,115) | | Net increase (decrease) in cash and cash equivalents | 45 | (53) | | Cash and cash equivalents at end of period | $467 | $422 | - Proceeds from the sale of businesses significantly contributed to positive investing cash flow in FY25 (**$623 million** vs $78 million in FY24)[26](index=26&type=chunk) - Net payments for common stock activity increased to **$1,762 million** in FY25 from $328 million in FY24[26](index=26&type=chunk) [Non-GAAP Financial Reconciliations](index=6&type=section&id=Non-GAAP%20Financial%20Reconciliations) This section provides reconciliations of GAAP to non-GAAP measures to clarify underlying operational performance [Adjusted Segment Operating Income and Organic Sales Growth](index=6&type=section&id=Adjusted%20Segment%20Operating%20Income%20and%20Organic%20Sales%20Growth) Adjusted segment operating margins were higher than reported figures due to the exclusion of amortization and realignment charges | Metric | Q4 FY25 (Reported) | Q4 FY25 (Adjusted) | FY25 (Reported) | FY25 (Adjusted) | | :-------------------------------------- | :----------------- | :----------------- | :-------------- | :-------------- | | Total Segment Operating Income ($M) | 1,254 | 1,410 | 4,561 | 5,189 | | Total Segment Operating Margin | 23.9% | 26.9% | 23.0% | 26.1% | | Total Organic Sales Growth | 2.1% | - | 1.3% | - | | Diversified Industrial North America Organic Sales Growth | (1.4)% | - | (3.7)% | - | | Diversified Industrial International Organic Sales Growth | 0.6% | - | (1.9)% | - | | Aerospace Systems Organic Sales Growth | 8.6% | - | 12.6% | - | - Adjustments primarily include amortization of acquired intangibles, business realignment charges, and integration costs[19](index=19&type=chunk) **Diversified Industrial International Businesses - Organic Sales Growth Supplement (Q4 FY25):** | Region | Reported Sales Growth | Currency | Organic Sales Growth | | :---------- | :-------------------- | :------- | :------------------- | | Europe | 3.0% | 6.2% | (3.2)% | | Asia Pacific| 6.9% | 1.3% | 5.6% | | Latin America | 0% | (3.8)% | 3.8% | [Adjusted Net Income and Diluted EPS](index=7&type=section&id=Adjusted%20Net%20Income%20and%20Diluted%20EPS) Adjusted net income and EPS were higher than reported figures after excluding non-recurring items and discrete tax benefits | Metric | Q4 FY25 (Reported) | Q4 FY25 (Adjusted) | FY25 (Reported) | FY25 (Adjusted) | | :---------------------- | :----------------- | :----------------- | :-------------- | :-------------- | | Net Income ($M) | 923 | 992 | 3,531 | 3,559 | | Diluted EPS | $7.15 | $7.69 | $27.12 | $27.33 | - Adjustments include amortization of acquired intangibles, business realignment charges, integration costs, gains on sale of buildings, gains on divestitures, and discrete tax benefits[21](index=21&type=chunk) [Adjusted EBITDA](index=7&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA and its corresponding margin were higher than reported figures after accounting for non-recurring charges and gains | Metric | Q4 FY25 (Reported) | Q4 FY25 (Adjusted) | FY25 (Reported) | FY25 (Adjusted) | | :---------------------- | :----------------- | :----------------- | :-------------- | :-------------- | | EBITDA ($M) | 1,400 | 1,403 | 5,423 | 5,233 | | EBITDA Margin | 26.7% | 26.8% | 27.3% | 26.4% | - Adjustments to EBITDA include business realignment charges, integration costs to achieve, gain on sale of buildings, gain on divestitures, and the Saegertown incident[24](index=24&type=chunk) [Forecasted Non-GAAP Reconciliations](index=10&type=section&id=Forecasted%20Non-GAAP%20Reconciliations) Fiscal year 2026 forecasts are adjusted to exclude currency impacts, divestitures, and other charges for a clearer operational view **Forecasted Sales Growth to Organic Sales Growth (FY26):** | Metric | Fiscal Year 2026 | | :---------------------- | :--------------- | | Forecasted net sales | 2.0% to 5.0% | | Currency | ~(1.5)% | | Divestitures | ~1.0% | | Adjusted forecasted net sales | 1.5% to 4.5% | **Forecasted Segment Operating Margin to Adjusted Forecasted Segment Operating Margin (FY26):** | Metric | Fiscal Year 2026 | | :-------------------------------------- | :--------------- | | Forecasted segment operating margin | 23.3% to 23.7% | | Business realignment charges | ~0.3% | | Amortization of acquired intangibles | ~2.7% | | Adjusted forecasted segment operating margin | 26.3% to 26.7% | **Forecasted Earnings Per Diluted Share to Adjusted Forecasted Earnings Per Diluted Share (FY26):** | Metric | Fiscal Year 2026 | | :-------------------------------------- | :--------------- | | Forecasted earnings per diluted share | $24.68 to $25.68 | | Business realignment charges | 0.54 | | Amortization of acquired intangibles | 4.26 | | Tax effect of adjustments | (1.08) | | Adjusted forecasted earnings per diluted share | $28.40 to $29.40 | [Company Information and Disclosures](index=4&type=section&id=Company%20Information%20and%20Disclosures) This section provides company background, notes on financial reporting methodologies, and forward-looking statement disclaimers [About Parker Hannifin](index=4&type=section&id=About%20Parker%20Hannifin) Parker Hannifin is a Fortune 250 global leader in motion and control technologies with over a century of engineering breakthroughs - Parker Hannifin is a **Fortune 250** global leader in motion and control technologies[12](index=12&type=chunk) - The company has been enabling engineering breakthroughs for **over a century**[12](index=12&type=chunk) - A webcast of the fiscal 2025 fourth quarter and full year results is available at investors.parker.com[12](index=12&type=chunk) [Note on Orders](index=4&type=section&id=Note%20on%20Orders) Order comparisons are reported at constant currency rates and exclude divestitures, using different averaging methods for each segment - Order comparisons are at **constant currency exchange rates**, excluding divestitures[13](index=13&type=chunk) - Diversified Industrial comparisons use **3-month average** computations[13](index=13&type=chunk) - Aerospace Systems comparisons use **rolling 12-month average** computations[13](index=13&type=chunk) [Note on Non-GAAP Financial Measures](index=4&type=section&id=Note%20on%20Non-GAAP%20Financial%20Measures) Non-GAAP measures are used to provide a comparable basis for evaluating performance, with reconciliations provided in financial tables - Non-GAAP measures include adjusted net income, adjusted EPS, adjusted segment operating margin, organic sales growth, and EBITDA margin[14](index=14&type=chunk) - These measures are used to meaningfully evaluate changes in performance on a **comparable basis** from period to period[14](index=14&type=chunk) - EBITDA is defined as earnings before interest, taxes, depreciation, and amortization[14](index=14&type=chunk) [Forward-Looking Statements](index=4&type=section&id=Forward-Looking%20Statements) The report contains forward-looking statements subject to risks and uncertainties that could cause actual results to differ materially - Forward-looking statements are based on known events and circumstances but are subject to **unforeseen uncertainties and risks**[15](index=15&type=chunk) - Future performance may differ materially from expectations due to factors such as changes in customer relationships, raw material costs, and economic conditions[16](index=16&type=chunk) - Readers should consider risk factors discussed in Parker's Annual Report on **Form 10-K** and other SEC filings[16](index=16&type=chunk)

Core Insights - Parker Hannifin Corporation reported outstanding performance for fiscal year 2025, achieving record levels in safety, engagement, earnings per share, margins, and cash flow [3] - The company generated full-year cash flow of $3.8 billion, increased its quarterly cash dividend by 10%, repurchased $1.6 billion of shares, and announced an acquisition of Curtis Instruments to enhance its electrification offerings [3][6] - For fiscal year 2026, the company anticipates continued growth in the Aerospace segment and a return to positive organic growth in its Industrial businesses [4] Fiscal 2025 Fourth Quarter Highlights - Sales reached a record $5.2 billion, with organic sales growth of 2% [6] - Net income was $923 million, an increase of 18%, or $992 million adjusted, reflecting a 12% increase [6] - Earnings per share (EPS) were $7.15, up 19%, or a record $7.69 adjusted, an increase of 14% [6] - Segment operating margin improved to 23.9%, an increase of 170 basis points, or 26.9% adjusted, an increase of 160 basis points [6] Fiscal 2025 Full Year Highlights - Total sales for the year were $19.9 billion, with organic sales growth of 1% [6] - Net income for the year was $3.5 billion, a 24% increase, or $3.6 billion adjusted, a 7% increase [6] - EPS for the year was $27.12, a 24% increase, or a record $27.33 adjusted, a 7% increase [6] - EBITDA margin was 27.3%, an increase of 210 basis points, or 26.4% adjusted, an increase of 80 basis points [6] Segment Performance - **Diversified Industrial Segment**: - Q4 sales were $3.6 billion, down 2.5% year-over-year, with an operating income of $847 million [23] - Operating margin was 23.9%, an increase of 200 basis points [23] - **Aerospace Systems Segment**: - Q4 sales were $1.7 billion, up 9.7% year-over-year, with an operating income of $407 million [9] - Operating margin improved to 24.3%, an increase of 260 basis points [9] Outlook for Fiscal Year 2026 - The company expects sales growth of 2% to 5%, with organic sales growth of approximately 3% at the midpoint [7] - Total segment operating margin is projected to be between 23.3% and 23.7%, or 26.3% to 26.7% on an adjusted basis [7] - EPS is forecasted to be between $24.68 and $25.68, or $28.40 to $29.40 on an adjusted basis [7] Order Rates - Overall order rates increased by 5% in Q4 [10] - Aerospace Systems Segment saw a significant increase in order rates of 12% [10] - Diversified Industrial Segment in North America experienced a 2% increase in order rates, while international businesses remained flat [10]

Core Viewpoint - Parker-Hannifin Corporation (PH) is expected to report its fourth-quarter fiscal 2025 results on August 7, with projected revenues of $5.10 billion, reflecting a 1.6% decline year-over-year, while earnings per share (EPS) are estimated to be $7.08, indicating a 4.6% increase from the previous year [1][10]. Group 1: Earnings Performance - The Zacks Consensus Estimate for revenues is $5.10 billion, down 1.6% from the prior-year quarter [1]. - The consensus estimate for earnings is $7.08 per share, which has increased by 0.1% in the past 30 days, representing a 4.6% rise from the year-ago quarter [1]. - Parker-Hannifin has a strong earnings surprise history, outperforming the Zacks Consensus Estimate in the last four quarters with an average surprise of 4.5% [2]. Group 2: Segment Performance - The Aerospace Systems segment is expected to perform well due to solid momentum in commercial and military markets, driven by healthy demand in general aviation and increased defense spending [3]. - The acquisition of Meggitt is anticipated to enhance the Aerospace Systems segment's results, with quarterly revenues estimated at $1.64 billion, reflecting a 7.1% growth year-over-year [4]. - The Diversified Industrial segment is likely to face challenges due to weak conditions in the off-highway market, with North America revenues estimated at $2.05 billion (down 7.9% year-over-year) and international revenues at $1.41 billion (down 1.4% year-over-year) [6][7]. Group 3: Strategic Initiatives - The Win Strategy, focusing on innovation and strategic positioning, is expected to support margins in the fiscal fourth quarter [5]. - The company has a positive Earnings ESP of +0.24%, with the Most Accurate Estimate at $7.10 per share, indicating a potential earnings beat [9].

Wall Street analysts forecast that Parker-Hannifin (PH) will report quarterly earnings of $7.08 per share in its upcoming release, pointing to a year-over-year increase of 4.6%. It is anticipated that revenues will amount to $5.1 billion, exhibiting a decrease of 1.6% compared to the year-ago quarter. The consensus EPS estimate for the quarter has been revised 0.1% lower over the last 30 days to the current level. This reflects how the analysts covering the stock have collectively reevaluated their initial ...

Group 1 - Parker Hannifin Corporation will release its fiscal 2025 fourth quarter and full year earnings on August 7, 2025, before the market opens [1] - A conference call will follow the earnings release at 11:00 a.m. Eastern time, where the company will discuss results and answer questions from investors and analysts [1] - The conference call will be webcast on Parker's investor website and archived for later replay [1] Group 2 - Parker Hannifin is recognized as a Fortune 250 global leader in motion and control technologies [2] - The company has a strong track record of increasing its annual dividend per share for 69 consecutive fiscal years, ranking among the top five longest-running dividend-increase records in the S&P 500 index [2]

Core Insights - Parker-Hannifin is recognized as a global leader in motion and control technology, demonstrating consistent organic sales and EPS growth over the past five years [1] - The company has achieved an expansion of adjusted operating margin by 630 basis points [1] - Parker-Hannifin has successfully doubled its free cash flow during the same period [1]

Core Viewpoint - Parker Hannifin Corporation has agreed to acquire Curtis Instruments, Inc. for approximately $1 billion in cash, enhancing its capabilities in electric vehicle technologies and positioning itself for future growth in electrification [1][3]. Company Overview - Parker Hannifin is a global leader in motion and control technologies, recognized for its long-standing commitment to innovation and shareholder value, having increased its annual dividend for 69 consecutive years [6]. Acquisition Details - The acquisition of Curtis Instruments is expected to close by the end of calendar year 2025, pending regulatory approvals [1]. - Curtis is projected to generate sales of approximately $320 million in calendar year 2025, providing a significant addition to Parker's revenue stream [2]. Strategic Alignment - The acquisition aligns with the long-term trend towards electrification, enhancing Parker's existing industrial electrification platform and enabling better service to customers adopting electric and hybrid solutions [3][8]. - The deal is expected to create operational synergies through Parker's proven business system, The Win Strategy™, which aims to deliver strong shareholder value [3]. Market Positioning - Curtis Instruments designs and manufactures products that complement Parker's strengths in electric vehicle motors and hydraulic technologies, thereby enhancing Parker's electrification capabilities [2][8]. - The acquisition is viewed positively by both Rehlko and its financial sponsor, Platinum Equity, who believe that Curtis will thrive under Parker's scale and investment focus [4].

Group 1: Company Performance - Parker-Hannifin Corporation (PH) is experiencing strong momentum in its Aerospace Systems segment, with organic revenues increasing approximately 12% year over year in Q3 of fiscal 2025 [1][6] - The company expects the Aerospace Systems segment's organic sales to continue growing by about 12% in fiscal 2025, driven by demand in the air transport and defense markets [1][6] - Parker-Hannifin has doubled its portfolio in aerospace, filtration, and engineered materials over the past eight years and is shifting towards longer-cycle products to achieve stable revenue streams [3] Group 2: Strategic Initiatives - The acquisition of Meggitt plc in September 2022 has expanded Parker-Hannifin's presence in the UK, enhancing its product offerings for aircraft and aero-engine components [2] - The company aims for 4-6% revenue growth by fiscal 2029, supported by its Win strategy, macro-CapEx reinvestment, and acquisitions [3][6] - Parker-Hannifin reported an adjusted segment operating margin of 26.3% in Q3, reflecting a 160 basis points increase from the previous year [3] Group 3: Shareholder Returns - In April 2025, Parker-Hannifin increased its dividend by 10% to $1.80 per share, with total dividends of $630.2 million in the first nine months of fiscal 2025, up 10.3% [4] - The company also repurchased shares worth $750 million during the same period [4] Group 4: Market Challenges - The Diversified Industrial segment is facing challenges due to weakness in the off-highway end market, particularly in construction and agriculture, as well as softness in the transportation end market [8] - Foreign currency translation negatively impacted sales by approximately 1% in Q3, with expectations of a 0.5% adverse effect on the top line in fiscal 2025 [9]