Parker(US:PH)2024-08-22 11:27Financial Performance - Net sales for 2024 increased to $19,930 million, up from $19,065 million in 2023, driven by higher sales in the Aerospace Systems Segment and the acquisition of Meggitt plc, which contributed approximately $501 million[103]. - Gross profit margin improved to 35.8% in 2024 from 33.7% in 2023, attributed to price increases, favorable product mix, and operational efficiencies[104]. - Net income attributable to common shareholders rose to $2,844 million in 2024, compared to $2,083 million in 2023, reflecting improved operational performance[103]. - Basic earnings per share increased to $22.13 in 2024, compared to $16.23 in 2023, reflecting a growth of 36.1%[174]. - Total income before income taxes was $3.595 billion in 2024, compared to $2.680 billion in 2023, reflecting a year-over-year increase of approximately 34.2%[212]. - Net income for the year ended June 30, 2024, was $2,844,936, an increase of 36.6% compared to $2,083,536 in 2023[180]. - The company’s total comprehensive income attributable to common shareholders for 2024 was $2,699,075, an increase from $2,333,262 in 2023[176]. Segment Performance - The Diversified Industrial Segment reported net sales of $14,457 million in 2024, down from $14,706 million in 2023, with a notable decrease in North America businesses[109]. - Operating income for the Diversified Industrial Segment increased to $3,176 million in 2024, up from $3,071 million in 2023, with operating income as a percentage of sales rising to 22.0%[109]. - Aerospace Systems Segment sales increased by $1.1 billion in 2024, driven by higher volume across all market segments, particularly the commercial aftermarket[122]. - Operating income for the Aerospace Systems Segment rose to $1,111 million in 2024, representing an operating margin of 20.3%, up from 12.9% in the previous year[121]. - Revenue from the Filtration and Engineered Materials segment was $6,078 million in 2024, up from $5,936 million in 2023[194]. Expenses and Cost Management - Selling, general and administrative expenses decreased to $3,315 million in 2024 from $3,354 million in 2023, primarily due to the absence of acquisition-related transaction costs in 2023[105]. - The effective tax rate improved to 20.9% in 2024 from 22.2% in 2023, due to increased discrete tax benefits and changes in state and local income taxes[108]. - Interest expense decreased to $506,495 in 2024 from $573,894 in 2023, a reduction of 11.7%[174]. - Business realignment charges for Diversified Industrial segment were $50.075 million in 2024, up from $23.641 million in 2023, and $13.787 million in 2022[207]. Cash Flow and Liquidity - Cash flows from operating activities were $3,384 million in 2024, an increase of $404 million from $2,980 million in 2023, attributed to improved earnings and working capital management[130]. - The company experienced a net cash used in investing activities of $298,588, a significant reduction from $8,176,812 in the previous year[180]. - The company continues to enhance liquidity and working capital efficiency through supply chain financing programs, which allow suppliers to be paid earlier[143]. Debt and Capital Structure - The Company’s debt to debt-shareholders' equity ratio was 0.47 to 1.0 as of June 30, 2024, well below the maximum allowed ratio of 0.65 to 1.0[142]. - Total long-term debt decreased to $8,412,014 in 2024 from $10,770,655 in 2023, a reduction of 21.9%[230]. - The carrying value of long-term debt decreased from $10.845 billion in 2023 to $8.470 billion in 2024, with an estimated fair value of $7.885 billion[290]. Acquisitions and Divestitures - The company divested two businesses in 2024 and completed one acquisition while divesting two businesses in 2023[144]. - The acquisition of Meggitt was completed for $7.2 billion, with Meggitt generating annual sales of approximately $2.1 billion[199]. - The company signed an agreement to divest its Meggitt composites and fuel containment business for an enterprise value of $560 million, with annual sales of approximately $350 million[189]. Pension and Employee Benefits - The net periodic benefit cost for U.S. pension plans was $(36.2) million in 2024, compared to $(29.1) million in 2023[239]. - The accumulated benefit obligation for all defined benefit plans was $5.4 billion in 2024, down from $5.7 billion in 2023[243]. - The company expects to make cash contributions of approximately $141 million to its defined benefit pension plans in 2025[243]. Stock and Shareholder Returns - The company has paid cash dividends for 296 consecutive quarters, with the current annual dividend rate at $6.52 per common share[137]. - The company paid dividends of $782,048, which is an increase from $704,054 in the previous year, representing a 11.1% rise[182]. - The number of common shares repurchased in 2024 was 438,229 at an average price of $456.38 per share[273].