Parker-Hannifin Corporation (PH - Free Report) has reported better-than-expected second-quarter fiscal 2021 (ended Dec 31, 2020) earnings, with a beat of 32.3%. Also, its sales surpassed estimates by 5.9%.
The company’s adjusted earnings were $3.44 per share in the quarter, surpassing the Zacks Consensus Estimate of $2.60. Also, the bottom line improved 35.4% from the year-ago quarter’s $2.54 per share.
Revenue Details
In the quarter, the company’s net sales were $3,411.9 million, reflecting a 2.5% year-over-year decline. Orders were flat in the quarter on a year-over-year basis.
Notably, the company’s top line surpassed the Zacks Consensus Estimate of $3,222 million.
Parker-Hannifin reports revenues under two segments. A brief discussion on the quarterly results is provided below:
The Diversified Industrial segment’s revenues totaled $2,826.5 million, representing 82.8% of net revenues in the quarter under review. On a year-over-year basis, the segment’s revenues increased 2.3%.
The segment’s revenues generated in North America totaled $1,566.9 million, decreasing 3% year over year. The segment’s International revenues were $1,259.6 million, up 9.8%. Orders in the quarter increased 1% for Diversified Industrial North America and that for Diversified Industrial International increased 10%.
The Aerospace Systems segment generated revenues of $585.4 million, accounting for 17.2% of net revenues in the reported quarter. Sales fell 20.4% year over year. Orders in the quarter decreased 18%.
Margin Profile
In the reported quarter, the company’s cost of sales decreased 6.1% year over year to $2,519.5 million. It represented 73.8% of the quarter’s net sales versus 76.7% in the year-ago quarter. Selling, general and administrative expenses decreased 27.3% to $356.6 million. It represented 10.5% of net sales versus 14% in the year-ago quarter.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter increased 9.8% year over year to $710.8 million. Adjusted EBITDA margin expanded 230 basis points to 20.8%. Interest expenses decreased 24% to $63 million.
Balance Sheet & Cash Flow
Exiting second quarter of fiscal 2021, Parker-Hannifin had cash and cash equivalents of $564.7 million, down 23.9% from $742.4 million recorded in the last reported quarter. Long-term debt was down 6.5% sequentially to $6,602.3 million.
In the first six months of fiscal 2021, the company generated net cash of $1,354 million from operating activities, reflecting growth of 63.9% from the year-ago period. Capital spending totaled $92.9 million compared with $118.6 million in the year-ago period.
In the first six months of fiscal 2021, the company paid out cash dividends of $227.2 million, relatively flat on a year-over-year basis.
Outlook
Parker-Hannifin intends to boost near-term revenues and profitability on the back of its Win Strategy. For fiscal 2021 (ending June 2021), the company currently anticipates generating adjusted earnings of $13.65-$14.15 per share, higher than $11.70-$12.30 guided previously.
Zacks Rank & Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks are AGCO Corporation (AGCO - Free Report) , AptarGroup, Inc. (ATR - Free Report) and Dover Corporation (DOV - Free Report) . While AGCO currently sports a Zacks Rank #1 (Strong Buy), AptarGroup and Dover carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
AGCO delivered a positive earnings surprise of 434.48%, on average, in the trailing four quarters.
AptarGroup delivered a positive earnings surprise of 10.91%, on average, in the trailing four quarters.
Dover delivered a positive earnings surprise of 20.01%, on average, in the trailing four quarters.
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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Parker-Hannifin Corporation (PH - Free Report) has reported better-than-expected second-quarter fiscal 2021 (ended Dec 31, 2020) earnings, with a beat of 32.3%. Also, its sales surpassed estimates by 5.9%.
The company’s adjusted earnings were $3.44 per share in the quarter, surpassing the Zacks Consensus Estimate of $2.60. Also, the bottom line improved 35.4% from the year-ago quarter’s $2.54 per share.
Revenue Details
In the quarter, the company’s net sales were $3,411.9 million, reflecting a 2.5% year-over-year decline. Orders were flat in the quarter on a year-over-year basis.
Notably, the company’s top line surpassed the Zacks Consensus Estimate of $3,222 million.
Parker-Hannifin reports revenues under two segments. A brief discussion on the quarterly results is provided below:
The Diversified Industrial segment’s revenues totaled $2,826.5 million, representing 82.8% of net revenues in the quarter under review. On a year-over-year basis, the segment’s revenues increased 2.3%.
The segment’s revenues generated in North America totaled $1,566.9 million, decreasing 3% year over year. The segment’s International revenues were $1,259.6 million, up 9.8%. Orders in the quarter increased 1% for Diversified Industrial North America and that for Diversified Industrial International increased 10%.
The Aerospace Systems segment generated revenues of $585.4 million, accounting for 17.2% of net revenues in the reported quarter. Sales fell 20.4% year over year. Orders in the quarter decreased 18%.
Margin Profile
In the reported quarter, the company’s cost of sales decreased 6.1% year over year to $2,519.5 million. It represented 73.8% of the quarter’s net sales versus 76.7% in the year-ago quarter. Selling, general and administrative expenses decreased 27.3% to $356.6 million. It represented 10.5% of net sales versus 14% in the year-ago quarter.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter increased 9.8% year over year to $710.8 million. Adjusted EBITDA margin expanded 230 basis points to 20.8%. Interest expenses decreased 24% to $63 million.
Balance Sheet & Cash Flow
Exiting second quarter of fiscal 2021, Parker-Hannifin had cash and cash equivalents of $564.7 million, down 23.9% from $742.4 million recorded in the last reported quarter. Long-term debt was down 6.5% sequentially to $6,602.3 million.
In the first six months of fiscal 2021, the company generated net cash of $1,354 million from operating activities, reflecting growth of 63.9% from the year-ago period. Capital spending totaled $92.9 million compared with $118.6 million in the year-ago period.
In the first six months of fiscal 2021, the company paid out cash dividends of $227.2 million, relatively flat on a year-over-year basis.
Outlook
Parker-Hannifin intends to boost near-term revenues and profitability on the back of its Win Strategy. For fiscal 2021 (ending June 2021), the company currently anticipates generating adjusted earnings of $13.65-$14.15 per share, higher than $11.70-$12.30 guided previously.
Zacks Rank & Other Stocks to Consider
The company currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks are AGCO Corporation (AGCO - Free Report) , AptarGroup, Inc. (ATR - Free Report) and Dover Corporation (DOV - Free Report) . While AGCO currently sports a Zacks Rank #1 (Strong Buy), AptarGroup and Dover carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
AGCO delivered a positive earnings surprise of 434.48%, on average, in the trailing four quarters.
AptarGroup delivered a positive earnings surprise of 10.91%, on average, in the trailing four quarters.
Dover delivered a positive earnings surprise of 20.01%, on average, in the trailing four quarters.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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