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Parker-Hannifin (PH) Q1 Earnings Beat, Revenues Up 14.5% Y/Y

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Parker-Hannifin Corporation (PH - Free Report) reported first-quarter fiscal 2024 (ended Sep 30, 2023) adjusted earnings (excluding 97 cents from non-recurring items) of $5.96 per share, which beat the Zacks Consensus Estimate of $5.33. The bottom line jumped 26% year over year.

Total revenues of $4,847.5 million missed the Zacks Consensus Estimate of $4,890.3 million. The top line jumped 14.5% year over year. Contribution from the Meggitt acquisition and operational improvement drove the company’s top line. Organic sales for the quarter increased 2% year over year. Orders were up 2% year over year.

Segmental Details

The Diversified Industrial segment’s revenues totaled $3,618.53 million, representing 74.6% of net revenues for the quarter under review. On a year-over-year basis, the segment’s revenues increased 3.8%.

Parker-Hannifin Corporation Price, Consensus and EPS Surprise

Parker-Hannifin Corporation Price, Consensus and EPS Surprise

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


Revenues generated in Diversified Industrial North America totaled $2,229.91 million, up 4.6% year over year. The Zacks Consensus Estimate for the same was $2,252 million. International revenues were $1,388.62 million, up 2.5% year over year. The consensus mark for Diversified International revenues was $1,399 million. Orders for Diversified Industrial North America and Diversified Industrial International declined 4% and 8% year over year, respectively.

The Aerospace Systems segment generated revenues of $1,228.96 million, which accounted for 25.3% of net revenues for the reported quarter. Sales jumped 64.7% year over year, thanks to the contribution from Meggitt acquisition (September 2022). The Zacks Consensus Estimate for Aerospace revenues was $1,232 million. Orders for the Aerospace Systems unit increased 24% on a rolling 12-month average basis.

Margin Profile

For the reported quarter, Parker-Hannifin’s cost of sales rose 10.8% year over year to $3,097.35 million. Selling, general and administrative expenses increased 4.5% from the prior year to $873.69 million.

Adjusted total segment operating income increased 25.8% year over year to $1,208 million. Adjusted total segment operating margin increased 220 basis points year over year to 24.9%.

Balance Sheet & Cash Flow

Exiting the fiscal first quarter, Parker-Hannifin had cash and cash equivalents of $448.93 million compared with $475.18 million at the end of fiscal 2023. Long-term debt was $8.60 billion compared with $8.80 billion at the end of fiscal 2023.

In the fiscal first quarter, PH generated net cash of $649.96 million from operating activities compared with $457.36 million in the year-ago period. Capital spending totaled $97.75 million in the reported quarter compared with $83.56 million in the year-ago period.

In the first quarter of fiscal 2024, Parker-Hannifin paid out cash dividends of $704.05 million, up 11.2% from the year-ago period.

Fiscal 2024 Guidance

Parker-Hannifin, carrying a Zacks Rank #3 (Hold), expects total sales to increase 2.5-5.5% year over year. Total segment margin is estimated to be between 20% and 20.4%. Adjusted segment margin is anticipated to be 23.4-23.8%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks.

PH expects adjusted earnings of $22.60-$23.40 per share for fiscal 2024. The mid-point of the guided range — $23 — lies above the Zacks Consensus Estimate of $22.62.

Performance of Other Industrial Companies

Cimpress plc (CMPR - Free Report) reported first-quarter fiscal 2024 (ended Sep 30, 2023) adjusted earnings of 17 cents per share, which surpassed the Zacks Consensus Estimate of a loss of 34 cents per share. The company incurred a loss of 97 cents per share in the year-ago quarter.

Cimpress’ total revenues of $757.3 million missed the Zack Consensus Estimate of $771 million. The top line increased 7.7% year over year, driven by growth across most of its businesses.
 
Stanley Black & Decker (SWK - Free Report) reported third-quarter 2023 adjusted earnings (excluding $1.02 from non-recurring items) of $1.05 per share, which beat the Zacks Consensus Estimate of 84 cents. The bottom line jumped 38.2% year over year due to lower costs.

Stanley Black’s net sales of $3,953.9 million missed the Zacks Consensus Estimate of $4,019.3 million. The top line also declined 4% year over year due to weakness in the Tools & Outdoor segment.


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