Parker-Hannifin Q2 Earnings Beat, Aerospace Systems Sales Up Y/Y

Parker-Hannifin Corporation PH reported second-quarter fiscal 2025 (ended Dec. 31, 2024) adjusted earnings (excluding 72 cents from non-recurring items) of $6.53 per share, which beat the Zacks Consensus Estimate of $6.22. The bottom line jumped 6% year over year.

Total sales of $4.74 billion missed the consensus estimate of $4.80 billion. The top line increased 1.6% year over year. Strength across businesses and transformed portfolio drove the top line. Organic sales grew 0.7% year over year. Orders grew 5% year over year.

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PH’s Segmental Details

The Diversified Industrial segment’s sales totaled $3.25 billion, representing 68.6% of total sales. On a year-over-year basis, the segment’s sales decreased 7.5%.

Sales from Diversified Industrial North America totaled $1.93 billion, down 8.6% year over year. The Zacks Consensus Estimate was pegged at $1.96 billion. Diversified International sales were $1.33 billion, down 5.7% year over year. The consensus mark was pegged at $1.37 billion.

Orders for Diversified Industrial North America increased 3% year over year while Diversified Industrial International orders increased 4% on a year-over-year basis.

The Aerospace Systems segment generated sales of $1.49 billion, which accounted for 31.4% of total sales. Sales jumped 14% year over year, thanks to aftermarket sales growth in both commercial and defense markets. The Zacks Consensus Estimate was pegged at $1.44 billion. Orders for the Aerospace Systems unit increased 9% on a year-over-year basis.

PH’s Margin Profile

Parker-Hannifin’s cost of sales was $3.02 billion, down 2.6% year over year. Selling, general and administrative expenses decreased 3% from the prior year to $782.4 million.

Adjusted total segment operating income increased 3.3% year over year to $1.05 billion. Adjusted total segment operating margin increased 110 basis points year over year to 22.1%.

PH’s Balance Sheet & Cash Flow

Exiting the fiscal second quarter, Parker-Hannifin had cash and cash equivalents of $395.5 million compared with $422 million at the end of fiscal 2024. Long-term debt was $6.67 billion compared with $7.16 billion at the end of fiscal 2024.

In the first six months of fiscal 2025, Parker-Hannifin generated net cash of $1.68 billion from operating activities compared with $1.35 billion in the year-ago period.

Capital spending totaled $216.5 million in the first six months of the fiscal year compared with $204.1 million in the year-ago period.

Parker-Hannifin paid out cash dividends of $420.1 million, up 10.2% year over year.

PH’s Fiscal 2025 Guidance Issued

Parker-Hannifin has updated its fiscal 2025 guidance. The company now expects total sales to decrease 2% - increase 1% year over year compared with an increase of 0.5-3.5% anticipated before. Organic sales are projected to increase approximately 2% compared with an increase of 1.5-4.5% expected earlier. Its adjusted operating margin is estimated to be approximately 25.8%.

Parker-Hannifin currently expects adjusted earnings to be in the band of $26.40-$27.00 per share. The Zacks Consensus Estimate for adjusted earnings is pegged at $26.73 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

Tetra Tech, Inc. TTEK reported earnings of $0.35 per share in the first quarter of fiscal 2025 (ended December 2024), which beat the Zacks Consensus Estimate of $0.34 . This compares with earnings of $0.28 per share a year ago.

Tetra posted revenues of $1.2 billion for the quarter ended December 2024, surpassing the consensus estimate by 8.85%. This compares with year-ago revenues of $1.02 billion. The company topped the consensus estimate for revenues in each of the last four quarters.

Waste Management, Inc. WM reported earnings of $1.70 per share in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $1.79 . This compares with earnings of $1.74 per share a year ago.

WM reported revenues of $5.89 billion for the quarter ended December 2024, surpassing the consensus estimate by 0.18%. This compares with year-ago revenues of $5.22 billion. The company topped the consensus estimate for revenues two times in the last four quarters.

Packaging Corporation of America PKG reported adjusted earnings per share of $2.47 in the fourth quarter of 2024, which missed the Zacks Consensus Estimate of $2.51 by a margin of 2%. The bottom line matched PKG’s guidance and grew 16% year over year.

Sales in the fourth quarter rose 10.7% year over year to $2.15 billion due to higher volumes and price/mix in both segments. The top line beat the consensus estimate of $2.13 billion.

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