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Parker-Hannifin (PH) Q4 Earnings & Revenues Beat Estimates

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Parker-Hannifin Corporation (PH - Free Report) has reported impressive fourth-quarter fiscal 2021 (ended Jun 30, 2021) results. Its earnings surpassed estimates by 1.4%, whereas sales surpassed the same by 1%.

Its adjusted earnings were $4.38 per share in the quarter, surpassing the Zacks Consensus Estimate of $4.32. Also, earnings increased 46% from the year-ago quarter’s $2.99 per share on sales and margin improvement.

In fiscal 2021, the company’s adjusted earnings were $15.04 per share, up from $12.44 per share a year ago.

Revenue Details

In the quarter under review, the company’s net sales were $3,958.9 million, reflecting 25% year-over-year growth. Organic sales in the quarter increased 22%. Orders were up 43% in the quarter. Also, the company’s top line surpassed the Zacks Consensus Estimate of $3,919 million.

In fiscal 2021, its net sales were $14,347.6 million, up 4.8% year over year.

Parker-Hannifin reports revenues under two segments. A brief discussion on the quarterly results is provided below:

The Diversified Industrial segment’s revenues totaled $3,328.9 million, representing 84.1% of net revenues in the quarter under review. On a year-over-year basis, the segment’s revenues increased 31.2%.

The segment’s revenues generated in North America totaled $1,823.1 million, increasing 26.6% year over year. The segment’s International revenues were $1,505.8 million, up 37.3%. Orders in the quarter increased 56% year over year for Diversified Industrial North America and that for Diversified Industrial International grew 58%.

The Aerospace Systems segment generated revenues of $630 million, accounting for 15.9% of net revenues in the reported quarter. Sales increased 1% year over year. Orders in the quarter decreased 7%.

Margin Profile

In the reported quarter, the company’s cost of sales increased 19.7% year over year to $2,832.3 million. It represented 71.5% of the quarter’s net sales versus 74.8% in the year-ago quarter. Selling, general and administrative expenses increased 17.3% to $414 million. It represented 10.5% 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 37.4% year over year to $876.5 million. Adjusted EBITDA margin expanded 190 bps to 22.1%. Interest expenses in the quarter decreased 19.1% to $60.3 million.

Balance Sheet & Cash Flow

Exiting the fourth quarter of fiscal 2021, Parker-Hannifin had cash and cash equivalents of $733.1 million, up 49.6% from $489.6 million recorded in the last reported quarter. Long-term debt was up 0.2% sequentially to $6,582.1 million.

In fiscal 2021, the company repaid $1,934 million of debts.

In fiscal 2021, it generated net cash of $2,575 million from operating activities, reflecting growth of 24.3% from the year-ago period. Capital spending totaled $210 million versus $232.6 million a year ago.

During fiscal 2021, the company paid out cash dividends of $475.2 million, up 4.7% from fiscal 2020.

Outlook

For fiscal 2022 (ending June 2022), the company anticipates adjusted earnings per share of $16.20-$17.00. Organic sales for the fiscal year are anticipated to grow 5-9% year over year.

Parker-Hannifin Corporation Price, Consensus and EPS Surprise

ParkerHannifin Corporation Price, Consensus and EPS Surprise

Parker-Hannifin Corporation price-consensus-eps-surprise-chart | Parker-Hannifin Corporation Quote

Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks are AZZ Inc. (AZZ - Free Report) , Brady Corporation (BRC - Free Report) and Eaton Corporation plc (ETN - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

AZZ delivered an earnings surprise of 21.24%, on average, in the trailing four quarters.

Brady delivered an earnings surprise of 1.58%, on average, in the trailing four quarters.

Eaton delivered an earnings surprise of 10.87%, on average, in the trailing four quarters.