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Parker-Hannifin (PH) Q4 Earnings Top, Revenues Miss Estimates

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Parker-Hannifin Corporation (PH - Free Report) reported mixed results for fourth-quarter fiscal 2018 (ended June 2018).

Earnings/ Revenues

Quarterly adjusted earnings came in at $3.22 per share, up 31.4% year over year. The bottom line also outpaced the Zacks Consensus Estimate of $2.91.

Adjusted earnings for fiscal 2018 came in at $10.42 per share, higher than the year-ago tally of $8.11 per share. Also, the bottom line surpassed the Zacks Consensus Estimate of $10.10.

Revenues in the fiscal fourth quarter were $3,817.4 million, up 9.2% year over year. However, the top line fell short of the Zacks Consensus Estimate of $3,837 million. Revenues during the quarter improved 9% year over year organically.

Revenues for fiscal 2018 came in at $14.3 billion, up from $12 billion recorded in the year-ago period. However, the reported figure came in line with the Zacks Consensus Estimate.

Segmental Break-Up

Revenues in the North American segment in the fiscal fourth quarter came in at $1,804.9 million, up 8.4% year over year.

The company’s International top-line performance improved 12.1% to $1,376.1 million in the reported quarter.

Revenues in the Aerospace Systems segment were $636.4 million, up 5.6% year over year.

Parker-Hannifin Corporation Price, Consensus and EPS Surprise

 

Parker-Hannifin Corporation Price, Consensus and EPS Surprise | Parker-Hannifin Corporation Quote

Costs/Margins

Cost of sales in the fiscal fourth quarter was $2,835.9 million, up 44.5% year over year. Selling, general and administrative expenses were $422.4 million, up from $402.4 million recorded in the year-ago quarter. Adjusted operating margin in Q4 was 17.5%, up 70 basis points (bps) year over year.

Balance Sheet/Cash Flow

Exiting fiscal 2018, Parker-Hannifin had cash and cash equivalents of $822.1 million, down from $884.9 million recorded as of Jun 30, 2017. Long-term debt stood at $4,318.6 million, down from $4,861.9 million recorded at the end of fiscal 2017.

In fiscal 2018, the company generated $1,600.3-million cash from operating activities, up from $1,302.5 million recorded in the comparable period last year. Capital expenditures totaled $2,46.7 million, up 21.6% year over year.

Full-year free cash-flow generation was $1.6 billion, up from $1.3 billion recorded in the year-earlier period.

Outlook

Parker-Hannifin intends to boost its near-term revenues and profitability on the back of its ongoing Win Strategy. The company anticipates generating adjusted earnings of $10.70-$11.50 per share in fiscal 2019. Organic revenue growth is predicted to lie within the 2.3-5.1% range.

Zacks Rank and Stocks to Consider

Parker-Hannifin currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the Zacks Industrial Products sector are listed below:

Altra Industrial Motion Corp. (AIMC - Free Report) currently sports a Zacks Rank #1 (Strong Buy). The company pulled off an average positive earnings surprise of 4.01% over the last four quarters. You can see the complete list of today’s Zacks Rank #1 Rank stocks here.

Chart Industries, Inc. (GTLS - Free Report) also flaunts a Zacks Rank of 1. The company recorded an average positive earnings surprise of 29.36% over the trailing four quarters.

Barnes Group, Inc. (B - Free Report) holds a Zacks Rank #2 (Buy). The company came up with an average positive earnings surprise of 6.88% during the same time frame.

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