Parker-Hannifin Corporation ( PH Quick Quote 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.