Parker-Hannifin Corporation ( PH Quick Quote PH - Free Report) reported second-quarter fiscal 2023 (ended Dec 31, 2022) adjusted earnings (excluding $1.72 from non-recurring items) of $4.76 per share, which surpassed the Zacks Consensus Estimate of $4.45. The bottom line improved 6.7% year over year. Total revenues of $4,674.8 million also outperformed the Zacks Consensus Estimate of $4,461.5 million. The top line jumped 22.2% year over year. Organic sales for the quarter increased 10.3% year over year. Orders were up 3% year over year. Segmental Details
The Diversified Industrial segment’s revenues totaled $3,538.38 million, representing 75.7% of net revenues for the quarter under review. On a year-over-year basis, the segment’s revenues increased 10.4%.
Revenues generated in North America totaled $2,140.69 million, up 18.5% year over year. International revenues were $1,397.70 million, nearly flat year over year. Orders for Diversified Industrial North America grew 2%, while Diversified Industrial International decreased 4% year over year. The Aerospace Systems segment generated revenues of $1,136.43 million, which accounted for 24.3% of net revenues for the reported quarter. Sales jumped 84% year over year. Orders for the quarter increased 22% on a rolling 12-month average basis. Margin Profile
For the reported quarter, Parker-Hannifin’s cost of sales rose 26.1% year over year to $3,236.81 million. Selling, general and administrative expenses increased 39.1% from the prior year to $814.97 million.
Adjusted total segment operating income increased 21.8% year over year to $1 billion. Adjusted total segment operating margin dipped 10 basis points year over year to 21.5%. Interest expenses for the quarter soared more than 100% year over year to $146.93 million. Balance Sheet & Cash Flow
Exiting the fiscal second quarter, Parker-Hannifin had cash and cash equivalents of $756.06 million compared with $449.48 million in the year-ago period. Long-term debt was $12.03 billion compared with $6.25 billion at the end of the year-ago period.
In the first six months of fiscal 2023, PH generated net cash of $1.08 billion from operating activities compared with $1 billion at the end of the year-ago quarter. Capital spending totaled $185.7 million in the first six months of fiscal 2023 compared with $105.61 million in the year-ago period. In the first six months of fiscal 2023, Parker-Hannifin paid out cash dividends of $342.36 million, up 28.9% from the year-ago period. Fiscal 2023 Outlook
Parker-Hannifin expects fiscal 2023 organic sales growth of 6-8%. Adjusted earnings are estimated to be $19.20-$19.70. The Zacks Consensus Estimate for the same stands at $19.12.
Zacks Rank & Key Picks
Parker-Hannifin currently carries a Zacks Rank #3 (Hold).
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