Back to top

Analyst Blog

Parker-Hannifin Corporation reported strong earnings for the fourth quarter and fiscal 2012. Quarterly earnings were $1.95 a share, which was 2.1% above the Zacks Consensus Estimate of $1.91 and  up 9.5% year over year.

Profits were driven by the company’s Win Strategy, which helped it generate a record operating margin of 15% for the first time since its inception, and strong performance of the Industrial segment in North America.

For fiscal 2012, the company generated earnings of $7.45 a share, which was 17% above the prior year earnings.

Total Revenue 

Parker-Hannifin posted sales of $3.4 billion, which were flat year over year. Organic sales growth came in at 3% driven by double-digit growth in the Industrial segment in North America. However, currency translation adversely impacted sales by 4% in the quarter, which was partially offset by 1% positive contribution from acquisitions. Orders declined 1% year over year.

Segment Revenue

On a segment basis, revenues from the Industrial segment in North America increased 9.0% to $1.34 billion. Industrial International segment declined 10.4% year over year to $1.24 billion.

Aerospace revenue increased 8.5% year over year to $566.0 million. Climate and Industrial Controls segment revenues declined 3.0% to $268.5 million.

Orders increased by 4% in the Industrial North America segment, but declined 9% in Industrial International. Aerospace reported an increase of 7% while Climate and Industrials Controls increased 1% year over year.

Income and Expenses

Net income for the quarter was $302.3 million, an increase of 2.6% year over year. Total segment operating margin reached a quarterly record of 15.5%, up from 14.8% in the previous quarter, propelled by strong operating margin in Industrial North America.

SG&A expense was $386.6 million in the quarter compared with $413.4 million in the fourth quarter of fiscal 2011.

Balance Sheet and Cash Flow

Exiting the year, the company had cash and cash equivalents of $838.3 million compared to $657.5 million at the end of the prior year. Long-term debt came in at $1.5 billion, down from $1.7 billion in the previous year.

The company generated cash flow from operations of $1.5 billion during the fourth quarter of fiscal 2012 compared to cash flow from operations of $1.2 billion in the year-ago period.


For fiscal 2013, the company expects earnings from continuing operations in the range of $7.10 to $7.90 per diluted share.  The guidance includes an expected increase in domestic qualified pension expense of approximately 35 cents per diluted share due to accounting regulations which require the use of a lower discount rate based on current market conditions.

Parker-Hannifin currently holds a Zacks Rank of # 3 which implies a short term Hold recommendation on the stock. 

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
RPC INC RES 24.91 +8.35%
LITHIA MOTO… LAD 94.59 +4.60%
DELTA AIR L… DAL 39.15 +3.90%
FLAMEL TECH… FLML 14.51 +3.50%
SOUTHWEST A… LUV 28.87 +2.92%