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Parker-Hannifin (PH) to Report Q3 Earnings: What's in Store?

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Parker-Hannifin Corporation (PH - Free Report) is slated to report third-quarter fiscal 2019 (ended March 2019) results on May 2, before market open.

The company pulled off average positive earnings surprise of 8.71% over the preceding four quarters. Notably, Parker-Hannifin’s second-quarter fiscal 2019 adjusted earnings of $2.51 per share outpaced the Zacks Consensus Estimate of $2.41.

In the past three months, the company’s shares have gained 11.3% compared with 15.5% growth recorded by the industry it belongs to.

Let’s see how things are shaping up prior to this announcement.

Factors to Influence Fiscal Q3 Results

Parker-Hannifin’s fiscal third-quarter top line is likely to benefit from favorable end-market conditions in its Diversified Industrial segment, particularly in North America. Also, strength in the company’s military and commercial original equipment manufacturing businesses and the aftermarket businesses will drive revenues of its Aerospace Systems segment.

Moreover, Parker-Hannifin expects increased productivity and innovative Win Strategy to boost its revenues and profitability in the fiscal third quarter. In addition, the company believes that increased synergy savings from CLARCOR acquisition (March 2017) and benefits of ongoing business-realignment moves will enhance its profitability in the to-be reported quarter. Nonetheless, the company noted that expenses associated with realignment expenses and CLARCOR integration cost will lower its earnings by 5 cents per share and 1 cent per share, respectively.

Parker-Hannifin intends to boost its revenues and profitability on the back of overseas business expansion. However, this exposes the company to several political, economical and environmental headwinds. The company anticipates to record adjusted earnings of $2.99 (at the mid-point) in the fiscal third quarter.

Earnings Whispers

Our proven model provides some idea on the stocks that are about to release their earnings results. Per the model, a stock needs to have a combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy), or at least 3 (Hold) for a likely earnings beat.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

That is not the case here as we will see below.

Earnings ESP: Parker-Hannifin has an Earnings ESP of -0.83% as the Most Accurate Estimate of $2.98 is pegged lower than the Zacks Consensus Estimate of $3.01.

Zacks Rank: The company’s Zacks Rank of 3, which combined with a negative Earnings ESP makes surprise prediction inconclusive.

It should be noted that we caution against stocks with a Zacks Rank #4 or 5 (Sell rated) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Key Picks

Here are some companies in the Zacks Industrial Products sector that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat this quarter:

DXP Enterprises, Inc. (DXPE - Free Report) has an Earnings ESP of +2.50% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Dover Corporation (DOV - Free Report) has an Earnings ESP of +0.29% and a Zacks Rank #2.

Colfax Corporation has an Earnings ESP of +2.27% and a Zacks Rank #3.

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