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Parker-Hannifin Corporation (PH - Analyst Report) reported modest first quarter 2014 results with net income of $244.3 million or $1.61 per share compared with $239.9 million or $1.57 per share in the year-earlier quarter. The year-over-year growth was driven by incremental orders in the quarter and lower share count. The reported earnings were 9.5% above the Zacks Consensus Estimate of $1.47.

Total Revenue

Total revenue in the first quarter increased marginally by 0.6% year over year to $3.23 billion from $3.21 billion in the year-ago quarter. Weak performance in the American market continued to affect the company’s revenues. However, this was offset by strong operational performance during the quarter. Revenues fell marginally short of the Zacks Consensus Estimate of $3.24 billion.

Segment Performance

Parker’s Industrial Sales segment comprises two sub segments -- Industrial North America and Industrial International.

 Industrial North America segment revenues declined 2.6% year over year to $1.39 billion. The operating income also declined 4% to $234.2 million in the quarter despite a 3% increase in orders compared with the year-ago period.

The Industrial International segment sales were up 1.8% to $1.27 billion. The operating income also increased year over year by 10.7% to $173.4 million, while orders increased 5% year over year.

Revenues in the Aerospace segment increased 4.9% year over year to $567.5 million though the operating income declined 7.4% to $57.3 million. The revenue increase was mainly driven by new orders, which increased 11% on a rolling 12-month average basis.

Balance Sheet & Cash Flow

At the end of the quarter, Parker’s cash and cash equivalents were $1.94 billion with long-term debt of $1.5 billion and a debt to capitalization ratio of 19.8% compared with 20.7% in the last quarter.

Cash flow from operating activities aggregated $282.7 million (8.8% of sales) including a discrete pension allowance of $75 million. Excluding this allowance, the cash flow was 11.1% of sales during the quarter.

Guidance

The company increased its fiscal 2014 guidance. Earnings from continuing operations for fiscal 2014 are currently expected to be in the range of $7.78 to $8.38 per share, up from its earlier guidance of $7.35 to $8.15 per share.

The guidance includes an expected gain of approximately $1.68 per share associated with a previously-announced joint venture agreement between Parker Aerospace and GE Aviation, an operating unit of General Electric Company (GE - Analyst Report), and restructuring expenses of approximately $100 million or 47 cents per share.

Parker’s shares carry a Zacks Rank #3 (Hold). Other stocks in the industry worth considering include Manitex International, Inc. (MNTX - Snapshot Report) and Colfax Corporation (CFX - Analyst Report). Manitex International has a Zacks Rank #1 (Strong Buy), while Colfax Corporation carries a Zacks Rank #2 (Buy).

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