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Parker-Hannifin (PH) Q2 Earnings, Revenues Beat Estimates

Parker-Hannifin Corporation PH reported impressive results for second-quarter fiscal 2019 (ended December 2018).

Earnings/ Revenues

Quarterly adjusted earnings came in at $2.51 per share, up 16.7% year over year. The bottom line also outpaced the Zacks Consensus Estimate of $2.41.

 

Parker-Hannifin Corporation Price, Consensus and EPS Surprise

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

 

Revenues for the fiscal second quarter were $3,472 million, up 3% year over year. The figure improved 6% organically. Moreover, the top line surpassed the consensus estimate of $3,453 million.

Segmental Break-Up

Revenues in the North American segment in the fiscal second quarter came in at $1,632.1 million, up 4.3% year over year.

The company’s International top-line performance depreciated 2.5% to $1,223.6 million in the reported quarter.

The Aerospace Systems segment generated revenues of $616.3 million, up 12.1% year over year.

Costs/Margins

Cost of sales in the fiscal second quarter was $2,602.3 million, up 1.5% year over year. Selling, general and administrative expenses were $394.3 million, down from $408.3 million incurred in the year-ago quarter. Adjusted operating margin in the quarter was 16.6%, up 170 basis points (bps) year over year.

Balance Sheet/Cash Flow

Exiting the fiscal second quarter, Parker-Hannifin had cash and cash equivalents of $1,047.4 million, up from $1,024.8 million recorded as of Dec 31, 2017. At the end of the reported quarter, long-term debt was $4,303.3 million compared with $4,798.4 million as of Dec 31, 2017.

In the first six months of fiscal 2019, the company generated $541 million cash from operating activities, up from $456.8 million witnessed in the comparable period last fiscal year. Capital expenditures totaled $94.4 million, down 34.8% year over year.

Outlook

Parker-Hannifin intends to boost its near-term revenues and profitability on the back of its Win Strategy. Based on favorable market conditions, this Zacks Rank #3 (Hold) company has raised its earnings view for fiscal 2019 from $11.10-$11.70 to $11.35-$11.85 per share. However, organic revenue growth is predicted to lie in the 2-4% range, lower than the prior view of 2.5-5.3%.

Stocks to Consider

Some better-ranked stocks in the space are DXP Enterprises, Inc. DXPE, Colfax Corp. CFX and Graco Inc. GGG. While DXP Enterprises sports a Zacks Rank #1 (Strong Buy), Colfax and Graco carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

DXP Enterprises exceeded estimates thrice in the trailing four quarters, the average beat being 112.62%.

Colfax surpassed estimates in each of the trailing four quarters, the average beat being 8.88%.

Graco surpassed estimates twice in the trailing four quarters, the average beat being 5.44%.

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