Parker-Hannifin Corporation (PH Quick QuotePH - Free Report) reported first-quarter fiscal 2027 (ended September 2026) adjusted earnings of $8.90 per share, which beat the Zacks Consensus Estimate of $8.23 by 8.1%. The bottom line increased 23.3% year over year.

Total sales of $5.99 billion surpassed the consensus estimate of $5.82 billion by 3.1%. The top line increased 17.9% year over year. Organic sales grew 11.5%, supported by broad-based demand across industrial and aerospace markets. Backlog reached a record $13.7 billion, with rolling 12-month orders increasing 13%.

PH's Industrial Businesses Deliver Broad-Based Growth

The Diversified Industrial segment recorded sales of $4.15 billion, up 20.6% year over year. Organic sales for the segment grew 10.3%, reflecting underlying demand gains apart from acquisitions and currency effects.

North America businesses generated sales of $2.45 billion, an increase of 19.6% from the prior-year quarter. Organic sales rose 9.4%, with growth across all market verticals. International businesses reported sales of $1.71 billion, up 22%, while organic growth was 11.6%.

International performance was led by Asia Pacific, where organic sales climbed 23.4%. Europe, the Middle East and Africa registered 4% organic growth, while Latin America declined 1.3%. Rolling 12-month orders increased 11% in North America and 14% internationally.

Parker-Hannifin's Aerospace Unit Maintains Momentum

Aerospace Systems sales totaled $1.87 billion, increasing 13.8% year over year. Organic sales advanced 13.9%, supported by double-digit growth in both original equipment manufacturer and aftermarket businesses.

The segment's adjusted operating income grew 16.7% to $574 million. Adjusted operating margin expanded 70 basis points to 30.7% from 30% in the year-ago quarter. Rolling 12-month orders increased 14%, reflecting sustained demand across aerospace markets.

PH's Costs Rise While Adjusted Margins Expand

Parker-Hannifin's cost of sales increased 17.4% year over year to $3.73 billion. Selling, general and administrative expenses rose 22% to $1.07 billion. Reported earnings were $6.92 per share compared with $6.29 in the prior-year period.

Adjusted total segment operating income increased to $1.72 billion from $1.39 billion a year earlier. Adjusted segment operating margin improved 120 basis points to a record 28.6%. The North America industrial business posted a 27.6% adjusted margin, up 60 basis points, while the international business improved 270 basis points to 27.7%.

Adjusted EBITDA margin also expanded 120 basis points year over year to 28.5%, reflecting improved profitability despite higher operating expenses.

Parker-Hannifin's Cash Flow and Debt Position

Cash provided by operating activities was $752 million in the quarter, down from $782 million a year earlier. Capital expenditures totaled $109 million compared with $89 million in the prior-year period. Free cash flow declined to $643 million from $693 million.

At the end of September 2026, PH had cash and cash equivalents of $711 million, up from $501 million at June 2026-end. Long-term debt was $12.73 billion compared with $6.77 billion at fiscal 2026-end. Net debt to trailing 12-month adjusted EBITDA stood at 2.7 times.

PH Raises Fiscal 2027 Outlook After Strong Start

Parker-Hannifin raised its fiscal 2027 reported sales growth forecast to 16-19% from 5.5-8.5%. The organic sales growth projection was lifted to 7.5-10.5% from 5.5-8.5%. The updated outlook includes $1.85 billion in sales from Filtration Group, whose acquisition has been completed. The company expects cumulative cost synergies of $40 million in fiscal 2027, rising to $220 million by fiscal 2030.

The company now expects adjusted segment operating margin of 27.7-28.1%, up from its prior forecast of 27.5-27.9%. Adjusted earnings guidance increased to $36.45-$37.25 per share from $34.25-$35.25. It also raised its free cash flow projection to $3.5-$4 billion from $3.4-$3.9 billion.

For the second quarter of fiscal 2027, Parker-Hannifin projects approximately 19.5% reported sales growth, 10% organic sales growth, a 27.6% adjusted segment operating margin and adjusted earnings of around $8.82 per share.

PH’s Zacks Rank

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

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Performance of Other Companies

In the third quarter of 2026, Graco Inc. (GGG Quick QuoteGGG - Free Report) came out with quarterly earnings of $0.81 per share, missing the Zacks Consensus Estimate of $0.82 per share. This compares with earnings of $0.73 per share a year ago.

Graco reported revenues of $586.39 million in the quarter ended September 2026, missing the Zacks Consensus Estimate by 0.58%. This compares with year-ago revenues of $543.36 million.

Dover Corporation (DOV Quick QuoteDOV - Free Report) has reported third-quarter 2026 adjusted earnings of $2.88 per share, rising 10% year over year and beating the Zacks Consensus Estimate of $2.83 by 1.77%. The improvement reflected broad-based demand, higher revenues and operational execution.

Revenues increased 7.5% year over year to $2.23 billion, beating the Zacks Consensus Estimate of $2.20 billion by 1.47%. Organic revenues grew 7.1%. Our model expected organic revenues to rise 4%.

Allegion plc (ALLE Quick QuoteALLE - Free Report) reported third-quarter 2026 adjusted earnings of $2.60 per share, up 13% year over year. The figure beat the Zacks Consensus Estimate of $2.49 by 4.4%, supported by strong organic growth and margin expansion.

Revenues increased 9.6% year over year to $1.17 billion, beating the Zacks Consensus Estimate of $1.13 billion by 3.4%. Organic revenues grew 7.2%, driven by strength in the Americas non-residential business, volume growth and price realization.