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Parker-Hannifin (PH) Beats on Q3 Earnings, Raises 2021 View
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Parker-Hannifin Corporation (PH - Free Report) has reported impressive results for the third quarter of fiscal 2021 (ended Mar 31, 2021). Its earnings surpassed estimates by 21.2%, whereas sales surpassed the same by 1%.
Its adjusted earnings were $4.11 per share in the quarter, surpassing the Zacks Consensus Estimate of $3.75. Also, earnings increased 21.2% from the year-ago quarter’s $3.39 per share on sales and margin improvement.
Revenue Details
In the quarter under review, the company’s net sales were $3,746.3 million, reflecting 1.2% year-over-year growth. Organic sales in the quarter declined 1% year over year. Orders were up 6% in the quarter.
Also, the company’s top line surpassed the Zacks Consensus Estimate of $3,710 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 $3,147.4 million, representing 84% of net revenues in the quarter under review. On a year-over-year basis, the segment’s revenues increased 6.4% year over year.
It is worth mentioning that the segment’s revenues generated in North America totaled $1,758.4 million, decreasing 1% year over year. However, the segment’s International revenues were $1,389 million, up 17.5% year over year. Orders in the quarter increased 11% year over year for Diversified Industrial North America and that for Diversified Industrial International grew 14%.
The Aerospace Systems segment generated revenues of $598.9 million, accounting for 16% of net revenues in the reported quarter. Sales decreased 19.6% year over year. Orders in the quarter decreased 19% year over year.
Margin Profile
In the reported quarter, the company’s cost of sales decreased 1.9% year over year to $2,714.8 million. It represented 72.5% of the quarter’s net sales versus 74.7% in the year-ago quarter. Selling, general and administrative expenses fell 6.4% year over year to $386.8 million. It represented 10.3% of net sales in the reported quarter versus 11.2% in the year-ago quarter.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter increased 14.6% year over year to $817 million. Adjusted EBITDA margin expanded 250 bps to 21.8%. Interest expenses in the quarter decreased 24.7% year over year to $60.8 million.
Balance Sheet & Cash Flow
Exiting the third quarter of fiscal 2021, Parker-Hannifin had cash and cash equivalents of $489.6 million, down 13.3% from $564.7 million recorded in the last reported quarter. Long-term debt was down 0.5% sequentially to $6,571.9 million.
In the first nine months of fiscal 2021, the company repaid $1,748.8 million of debts.
In the first nine months of fiscal 2021, it generated net cash of $1,881.4 million from operating activities, reflecting growth of 45.7% from the year-ago period. Capital spending totaled $136.1 million versus $182.5 million in the year-ago comparable period.
During the period, the company paid out cash dividends of $341.3 million, up 0.3% from the first nine months of fiscal 2020.
Outlook
For fiscal 2021 (ending June 2021), the company anticipates adjusted earnings per share of $14.65-$14.95 as compared with $13.65-$14.15 per share mentioned previously.
Sales for the fiscal year are anticipated to grow 4-5% year over year, up from 0.7-2.7% mentioned previously. On a segmental basis, the company predicts year-over-year sales growth of 3.5-4.5% for Diversified Industrial North America and a year-over-year increase of 14.5-15.5% for Diversified Industrial International. Aerospace Systems sales are expected to decline 12.5-13.5% year over year.
ParkerHannifin Corporation Price, Consensus and EPS Surprise
In the past 60 days, earnings estimates for these companies improved for the current year. Further, earnings surprise for the last reported quarter was 46.34% for Helios Technologies, 28.95% for Applied Industrial and 143.14% for EnPro Industries.
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Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
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Parker-Hannifin (PH) Beats on Q3 Earnings, Raises 2021 View
Parker-Hannifin Corporation (PH - Free Report) has reported impressive results for the third quarter of fiscal 2021 (ended Mar 31, 2021). Its earnings surpassed estimates by 21.2%, whereas sales surpassed the same by 1%.
Its adjusted earnings were $4.11 per share in the quarter, surpassing the Zacks Consensus Estimate of $3.75. Also, earnings increased 21.2% from the year-ago quarter’s $3.39 per share on sales and margin improvement.
Revenue Details
In the quarter under review, the company’s net sales were $3,746.3 million, reflecting 1.2% year-over-year growth. Organic sales in the quarter declined 1% year over year. Orders were up 6% in the quarter.
Also, the company’s top line surpassed the Zacks Consensus Estimate of $3,710 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 $3,147.4 million, representing 84% of net revenues in the quarter under review. On a year-over-year basis, the segment’s revenues increased 6.4% year over year.
It is worth mentioning that the segment’s revenues generated in North America totaled $1,758.4 million, decreasing 1% year over year. However, the segment’s International revenues were $1,389 million, up 17.5% year over year. Orders in the quarter increased 11% year over year for Diversified Industrial North America and that for Diversified Industrial International grew 14%.
The Aerospace Systems segment generated revenues of $598.9 million, accounting for 16% of net revenues in the reported quarter. Sales decreased 19.6% year over year. Orders in the quarter decreased 19% year over year.
Margin Profile
In the reported quarter, the company’s cost of sales decreased 1.9% year over year to $2,714.8 million. It represented 72.5% of the quarter’s net sales versus 74.7% in the year-ago quarter. Selling, general and administrative expenses fell 6.4% year over year to $386.8 million. It represented 10.3% of net sales in the reported quarter versus 11.2% in the year-ago quarter.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter increased 14.6% year over year to $817 million. Adjusted EBITDA margin expanded 250 bps to 21.8%. Interest expenses in the quarter decreased 24.7% year over year to $60.8 million.
Balance Sheet & Cash Flow
Exiting the third quarter of fiscal 2021, Parker-Hannifin had cash and cash equivalents of $489.6 million, down 13.3% from $564.7 million recorded in the last reported quarter. Long-term debt was down 0.5% sequentially to $6,571.9 million.
In the first nine months of fiscal 2021, the company repaid $1,748.8 million of debts.
In the first nine months of fiscal 2021, it generated net cash of $1,881.4 million from operating activities, reflecting growth of 45.7% from the year-ago period. Capital spending totaled $136.1 million versus $182.5 million in the year-ago comparable period.
During the period, the company paid out cash dividends of $341.3 million, up 0.3% from the first nine months of fiscal 2020.
Outlook
For fiscal 2021 (ending June 2021), the company anticipates adjusted earnings per share of $14.65-$14.95 as compared with $13.65-$14.15 per share mentioned previously.
Sales for the fiscal year are anticipated to grow 4-5% year over year, up from 0.7-2.7% mentioned previously. On a segmental basis, the company predicts year-over-year sales growth of 3.5-4.5% for Diversified Industrial North America and a year-over-year increase of 14.5-15.5% for Diversified Industrial International. Aerospace Systems sales are expected to decline 12.5-13.5% year over year.
ParkerHannifin Corporation Price, Consensus and EPS Surprise
ParkerHannifin Corporation price-consensus-eps-surprise-chart | ParkerHannifin Corporation Quote
Zacks Rank & Stocks to Consider
With a market capitalization of $41.3 billion, Parker-Hannifin currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the industry are Helios Technologies, Inc. (HLIO - Free Report) , Applied Industrial Technologies, Inc. (AIT - Free Report) and EnPro Industries, Inc. (NPO - Free Report) . While Helios Technologies currently sports a Zacks Rank #1 (Strong Buy), both Applied Industrial and EnPro Industries carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for these companies improved for the current year. Further, earnings surprise for the last reported quarter was 46.34% for Helios Technologies, 28.95% for Applied Industrial and 143.14% for EnPro Industries.
These Stocks Are Poised to Soar Past the Pandemic
The COVID-19 outbreak has shifted consumer behavior dramatically, and a handful of high-tech companies have stepped up to keep America running. Right now, investors in these companies have a shot at serious profits. For example, Zoom jumped 108.5% in less than 4 months while most other stocks were sinking.
Our research shows that 5 cutting-edge stocks could skyrocket from the exponential increase in demand for “stay at home” technologies. This could be one of the biggest buying opportunities of this decade, especially for those who get in early.
See the 5 high-tech stocks now>>