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Parker-Hannifin Corporation (PH - Free Report) reported impressive second-quarter fiscal 2022 (ended Dec 31, 2021) results. Its earnings and sales surpassed estimates by 15.8% and 3.1%, respectively.
Adjusted earnings were $4.46 per share, surpassing the Zacks Consensus Estimate of $3.85. Also, earnings increased 29.3% from the year-ago quarter’s $3.45 per share on sales and margin improvement.
Revenue Details
For the quarter under review, the company’s net sales were $3,824.6 million, reflecting 12.1% year-over-year growth. Organic sales for the quarter increased 13% year over year. Orders were up 12% year over year for the quarter. The top line surpassed the Zacks Consensus Estimate of $3,709 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 $3,206.2 million, representing 83.8% of net revenues for the quarter under review. On a year-over-year basis, the segment’s revenues increased 13.4%.
The segment’s revenues generated in North America totaled $1,807 million, increasing 15.3% year over year. The segment’s International revenues were $1,399.2 million, up 11.1% from the prior-year quarter. Orders for Diversified Industrial North America and Diversified Industrial International grew 17% and 14% year over year, respectively, for the quarter.
The Aerospace Systems segment generated revenues of $618.4 million, accounting for 16.2% of net revenues for the reported quarter. Sales increased 5.6% year over year. Orders for the quarter decreased 7% from the year-ago quarter.
Parker-Hannifin Corporation Price, Consensus and EPS Surprise
For the reported quarter, the company’s cost of sales increased 9.8% year over year to $2,764.7 million. It represented 72.3% of the quarter’s net sales compared with 73.8% in the year-ago quarter. Selling, general and administrative expenses increased 6.8% from the prior-year figure to $380.7 million. It represented 10% of net sales for the reported quarter compared with 10.5% in the year-ago period.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter increased 22% year over year to $868.8 million. Adjusted EBITDA margin expanded 180 bps to 22.7%. Interest expenses for the quarter decreased 2.5% from the prior-year period to $61.4 million.
Balance Sheet & Cash Flow
Exiting second-quarter fiscal 2022, Parker-Hannifin had cash and cash equivalents of $449.5 million, down 6.1% from $478.6 million recorded in the last reported quarter. Long-term debt was down 0.2% sequentially to $6,250.5 million.
For the first six months of fiscal 2022, the company’s net proceeds from debt were $1,900.8 million.
In the first six months of fiscal 2022, it generated net cash of $1,005.5 million from operating activities, reflecting a 25.7% decline from the year-ago period. Capital spending totaled $105.6 million compared with $92.9 million a year ago.
During the first six months of fiscal 2022, the company paid out cash dividends of $265.6 million, up 16.9% from the year-ago period.
Outlook
For fiscal 2022 (ending June 2022), PH updated its financial guidance. It currently anticipates adjusted earnings per share of $17.80-$18.30 compared with $16.95-$17.65, guided earlier. Organic sales for the fiscal year are anticipated to grow 10-12% year over year compared with 7-10% estimated previously.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked companies in the industry are discussed below.
Its earnings surprise in the last reported quarter was 16.82%, on average.
Ferguson’s earnings estimates increased 0.1% for fiscal 2022 (ending July 2022) and 0.6% for fiscal 2023 (ending July 2023) in the past 30 days. Its shares have gained 4.8% in the past three months.
Graco Inc. (GGG - Free Report) presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 2.5%, on average.
In the past 30 days, Graco’s earnings estimates have increased 0.7% for 2022 but decreased 1.7% for 2022. GGG’s shares have lost 3.9% in the past three months.
Xometry, Inc. (XMTR - Free Report) presently carries a Zacks Rank #2. In the last reported quarter, its earnings missed the consensus estimate by 6.5%.
Xometry’s bottom-line estimates have increased 2.2% for 2021 (whose results await) and decreased 52.2% for 2022 in the past 30 days. Its shares have lost 15.6% in the past three months.
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Parker-Hannifin (PH) Q2 Earnings & Revenues Beat Estimates
Parker-Hannifin Corporation (PH - Free Report) reported impressive second-quarter fiscal 2022 (ended Dec 31, 2021) results. Its earnings and sales surpassed estimates by 15.8% and 3.1%, respectively.
Adjusted earnings were $4.46 per share, surpassing the Zacks Consensus Estimate of $3.85. Also, earnings increased 29.3% from the year-ago quarter’s $3.45 per share on sales and margin improvement.
Revenue Details
For the quarter under review, the company’s net sales were $3,824.6 million, reflecting 12.1% year-over-year growth. Organic sales for the quarter increased 13% year over year. Orders were up 12% year over year for the quarter. The top line surpassed the Zacks Consensus Estimate of $3,709 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 $3,206.2 million, representing 83.8% of net revenues for the quarter under review. On a year-over-year basis, the segment’s revenues increased 13.4%.
The segment’s revenues generated in North America totaled $1,807 million, increasing 15.3% year over year. The segment’s International revenues were $1,399.2 million, up 11.1% from the prior-year quarter. Orders for Diversified Industrial North America and Diversified Industrial International grew 17% and 14% year over year, respectively, for the quarter.
The Aerospace Systems segment generated revenues of $618.4 million, accounting for 16.2% of net revenues for the reported quarter. Sales increased 5.6% year over year. Orders for the quarter decreased 7% from the year-ago quarter.
Parker-Hannifin Corporation Price, Consensus and EPS Surprise
Parker-Hannifin Corporation price-consensus-eps-surprise-chart | Parker-Hannifin Corporation Quote
Margin Profile
For the reported quarter, the company’s cost of sales increased 9.8% year over year to $2,764.7 million. It represented 72.3% of the quarter’s net sales compared with 73.8% in the year-ago quarter. Selling, general and administrative expenses increased 6.8% from the prior-year figure to $380.7 million. It represented 10% of net sales for the reported quarter compared with 10.5% in the year-ago period.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) for the quarter increased 22% year over year to $868.8 million. Adjusted EBITDA margin expanded 180 bps to 22.7%. Interest expenses for the quarter decreased 2.5% from the prior-year period to $61.4 million.
Balance Sheet & Cash Flow
Exiting second-quarter fiscal 2022, Parker-Hannifin had cash and cash equivalents of $449.5 million, down 6.1% from $478.6 million recorded in the last reported quarter. Long-term debt was down 0.2% sequentially to $6,250.5 million.
For the first six months of fiscal 2022, the company’s net proceeds from debt were $1,900.8 million.
In the first six months of fiscal 2022, it generated net cash of $1,005.5 million from operating activities, reflecting a 25.7% decline from the year-ago period. Capital spending totaled $105.6 million compared with $92.9 million a year ago.
During the first six months of fiscal 2022, the company paid out cash dividends of $265.6 million, up 16.9% from the year-ago period.
Outlook
For fiscal 2022 (ending June 2022), PH updated its financial guidance. It currently anticipates adjusted earnings per share of $17.80-$18.30 compared with $16.95-$17.65, guided earlier. Organic sales for the fiscal year are anticipated to grow 10-12% year over year compared with 7-10% estimated previously.
Zacks Rank & Stocks to Consider
The company currently carries a Zacks Rank #4 (Sell).
Some better-ranked companies in the industry are discussed below.
Ferguson plc (FERG - Free Report) presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Its earnings surprise in the last reported quarter was 16.82%, on average.
Ferguson’s earnings estimates increased 0.1% for fiscal 2022 (ending July 2022) and 0.6% for fiscal 2023 (ending July 2023) in the past 30 days. Its shares have gained 4.8% in the past three months.
Graco Inc. (GGG - Free Report) presently carries a Zacks Rank #2 (Buy). Its earnings surprise in the last four quarters was 2.5%, on average.
In the past 30 days, Graco’s earnings estimates have increased 0.7% for 2022 but decreased 1.7% for 2022. GGG’s shares have lost 3.9% in the past three months.
Xometry, Inc. (XMTR - Free Report) presently carries a Zacks Rank #2. In the last reported quarter, its earnings missed the consensus estimate by 6.5%.
Xometry’s bottom-line estimates have increased 2.2% for 2021 (whose results await) and decreased 52.2% for 2022 in the past 30 days. Its shares have lost 15.6% in the past three months.