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]