Parker-Hannifin Corporation (PH - Free Report) reported fourth-quarter fiscal 2023 (ended Jun 30, 2023) adjusted earnings (excluding 64 cents from non-recurring items) of $6.08 per share, which beat the Zacks Consensus Estimate of $5.50. The bottom line jumped 17.8% year over year.
Total revenues of $5,095.9 million also outperformed the Zacks Consensus Estimate of $5,008.9 million. The top line jumped 21.7% year over year. Contribution from the Meggitt acquisition and operational improvement drove the company’s top line. Organic sales for the quarter increased 6% year over year. Orders were up 3% year over year.
Segmental Details
The Diversified Industrial segment’s revenues totaled $3,813.43 million, representing 74.8% of net revenues for the quarter under review. On a year-over-year basis, the segment’s revenues increased 8.6%.
Revenues generated in Diversified Industrial North America totaled $2,301.16 million, up 10% year over year. The Zacks Consensus Estimate for the same was $2,226.23 million. International revenues were $1,512.27 million, up 6% year over year. The consensus mark for Diversified International revenues was $1,428.91 million. Orders for Diversified Industrial North America and Diversified Industrial International declined 8% and 1% year over year, respectively.
The Aerospace Systems segment generated revenues of $1,282.51 million, which accounted for 25.2% of net revenues for the reported quarter. Sales jumped 90% year over year, thanks to the contribution from Meggitt acquisition (September 2022). The Zacks Consensus Estimate for Aerospace revenues was $1,229.30 million. Orders for the Aerospace Systems unit increased 28% on a rolling 12-month average basis.
Margin Profile
For the reported quarter, Parker-Hannifin’s cost of sales rose 17.84% year over year to $3,262.86 million. Selling, general and administrative expenses increased 28.3% from the prior year to $834.94 million.
Adjusted total segment operating income increased 27.5% year over year to $1,224.11 million. Adjusted total segment operating margin increased110 basis points year over year to 24%. Interest expenses for the quarter surged more than 100% year over year to $157.18 million.
Balance Sheet & Cash Flow
Exiting the fiscal fourth quarter, Parker-Hannifin had cash and cash equivalents of $475.18 million compared with $535.80 million in the year-ago period. Long-term debt was $8.80 billion compared with $9.76 billion at the end of the year-ago period.
In fiscal 2023, PH generated net cash of $2.98 billion from operating activities compared with $2.44 billion at the end of the year-ago quarter. Capital spending totaled $380.75 million in fiscal 2023 compared with $230.04 million in the year-ago period.
In fiscal 2023, Parker-Hannifin paid out cash dividends of $704.05 million, up 23.5% from the year-ago period.
Fiscal 2024 Guidance
For fiscal 2024, Parker-Hannifin, carrying a Zacks Rank #2 (Buy), expects total sales to increase 3-6% year over year. Total adjusted segment operating margin is estimated to be 23-23.4%. Adjusted earnings per share are predicted to be in the band of $21.90-$22.90. The mid-point of the guided range — $22.40 — lies above the Zacks Consensus Estimate of $22.13. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
Performance of Other Industrial Companies
A. O. Smith Corporation’s (AOS - Free Report) second-quarter 2023 adjusted earnings (excluding 3 cents from non-recurring items) of $1.01 per share surpassed the Zacks Consensus Estimate of adjusted earnings of 91 cents per share. The bottom line jumped 23.2% year over year.
A. O. Smith’s net sales of $960.8 million underperformed the consensus estimate of $971 million. The top line dipped 0.5% year over year.
Allegion plc’s (ALLE - Free Report) second-quarter 2023 adjusted earnings of $1.76 per share surpassed the Zacks Consensus Estimate of $1.69. The bottom line increased 28.5% year over year.
Allegion’s revenues of $912.5 million missed the Zacks Consensus Estimate of $927 million. However, the top line jumped 18% from the year-ago quarter.
IDEX Corporation’s (IEX - Free Report) second-quarter 2023 adjusted earnings of $2.18 per share surpassed the Zacks Consensus Estimate of adjusted earnings of $2.12 per share. On a year-over-year basis, the bottom line increased 7.9%.
IDEX’s net sales of $846.2 million underperformed the Zacks Consensus Estimate of $847 million. However, the top line increased 6.3% year over year. Organic sales in the quarter increased 3% year over year.
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Parker-Hannifin Corporation (PH - Free Report) reported fourth-quarter fiscal 2023 (ended Jun 30, 2023) adjusted earnings (excluding 64 cents from non-recurring items) of $6.08 per share, which beat the Zacks Consensus Estimate of $5.50. The bottom line jumped 17.8% year over year.
Total revenues of $5,095.9 million also outperformed the Zacks Consensus Estimate of $5,008.9 million. The top line jumped 21.7% year over year. Contribution from the Meggitt acquisition and operational improvement drove the company’s top line. Organic sales for the quarter increased 6% year over year. Orders were up 3% year over year.
Segmental Details
The Diversified Industrial segment’s revenues totaled $3,813.43 million, representing 74.8% of net revenues for the quarter under review. On a year-over-year basis, the segment’s revenues increased 8.6%.
Revenues generated in Diversified Industrial North America totaled $2,301.16 million, up 10% year over year. The Zacks Consensus Estimate for the same was $2,226.23 million. International revenues were $1,512.27 million, up 6% year over year. The consensus mark for Diversified International revenues was $1,428.91 million. Orders for Diversified Industrial North America and Diversified Industrial International declined 8% and 1% year over year, respectively.
The Aerospace Systems segment generated revenues of $1,282.51 million, which accounted for 25.2% of net revenues for the reported quarter. Sales jumped 90% year over year, thanks to the contribution from Meggitt acquisition (September 2022). The Zacks Consensus Estimate for Aerospace revenues was $1,229.30 million. Orders for the Aerospace Systems unit increased 28% on a rolling 12-month average basis.
Margin Profile
For the reported quarter, Parker-Hannifin’s cost of sales rose 17.84% year over year to $3,262.86 million. Selling, general and administrative expenses increased 28.3% from the prior year to $834.94 million.
Adjusted total segment operating income increased 27.5% year over year to $1,224.11 million. Adjusted total segment operating margin increased110 basis points year over year to 24%. Interest expenses for the quarter surged more than 100% year over year to $157.18 million.
Balance Sheet & Cash Flow
Exiting the fiscal fourth quarter, Parker-Hannifin had cash and cash equivalents of $475.18 million compared with $535.80 million in the year-ago period. Long-term debt was $8.80 billion compared with $9.76 billion at the end of the year-ago period.
In fiscal 2023, PH generated net cash of $2.98 billion from operating activities compared with $2.44 billion at the end of the year-ago quarter. Capital spending totaled $380.75 million in fiscal 2023 compared with $230.04 million in the year-ago period.
In fiscal 2023, Parker-Hannifin paid out cash dividends of $704.05 million, up 23.5% from the year-ago period.
Fiscal 2024 Guidance
For fiscal 2024, Parker-Hannifin, carrying a Zacks Rank #2 (Buy), expects total sales to increase 3-6% year over year. Total adjusted segment operating margin is estimated to be 23-23.4%. Adjusted earnings per share are predicted to be in the band of $21.90-$22.90. The mid-point of the guided range — $22.40 — lies above the Zacks Consensus Estimate of $22.13. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.
Performance of Other Industrial Companies
A. O. Smith Corporation’s (AOS - Free Report) second-quarter 2023 adjusted earnings (excluding 3 cents from non-recurring items) of $1.01 per share surpassed the Zacks Consensus Estimate of adjusted earnings of 91 cents per share. The bottom line jumped 23.2% year over year.
A. O. Smith’s net sales of $960.8 million underperformed the consensus estimate of $971 million. The top line dipped 0.5% year over year.
Allegion plc’s (ALLE - Free Report) second-quarter 2023 adjusted earnings of $1.76 per share surpassed the Zacks Consensus Estimate of $1.69. The bottom line increased 28.5% year over year.
Allegion’s revenues of $912.5 million missed the Zacks Consensus Estimate of $927 million. However, the top line jumped 18% from the year-ago quarter.
IDEX Corporation’s (IEX - Free Report) second-quarter 2023 adjusted earnings of $2.18 per share surpassed the Zacks Consensus Estimate of adjusted earnings of $2.12 per share. On a year-over-year basis, the bottom line increased 7.9%.
IDEX’s net sales of $846.2 million underperformed the Zacks Consensus Estimate of $847 million. However, the top line increased 6.3% year over year. Organic sales in the quarter increased 3% year over year.
Zacks Names #1 Semiconductor Stock
It's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.
With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.
See This Stock Now for Free >>
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