Parker Reports Fiscal 2025 Fourth Quarter and Full Year Results

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]