) reported modest first quarter 2014 results with net income of
$244.3 million or $1.61 per share compared with $239.9 million or
$1.57 per share in the year-earlier quarter. The year-over-year
growth was driven by incremental orders in the quarter and lower
share count. The reported earnings were 9.5% above the Zacks
Consensus Estimate of $1.47.
Total revenue in the first quarter increased marginally by
0.6% year over year to $3.23 billion from $3.21 billion in the
year-ago quarter. Weak performance in the American market
continued to affect the company's revenues. However, this was
offset by strong operational performance during the quarter.
Revenues fell marginally short of the Zacks Consensus Estimate of
segment comprises two sub segments -- Industrial North America
and Industrial International.
Industrial North America segment revenues declined 2.6%
year over year to $1.39 billion. The operating income also
declined 4% to $234.2 million in the quarter despite a 3%
increase in orders compared with the year-ago period.
The Industrial International segment sales were up 1.8% to
$1.27 billion. The operating income also increased year over year
by 10.7% to $173.4 million, while orders increased 5% year over
Revenues in the
segment increased 4.9% year over year to $567.5 million though
the operating income declined 7.4% to $57.3 million. The revenue
increase was mainly driven by new orders, which increased 11% on
a rolling 12-month average basis.
Balance Sheet & Cash Flow
At the end of the quarter, Parker's cash and cash equivalents
were $1.94 billion with long-term debt of $1.5 billion and a debt
to capitalization ratio of 19.8% compared with 20.7% in the last
Cash flow from operating activities aggregated $282.7 million
(8.8% of sales) including a discrete pension allowance of $75
million. Excluding this allowance, the cash flow was 11.1% of
sales during the quarter.
The company increased its fiscal 2014 guidance. Earnings from
continuing operations for fiscal 2014 are currently expected to
be in the range of $7.78 to $8.38 per share, up from its earlier
guidance of $7.35 to $8.15 per share.
The guidance includes an expected gain of approximately $1.68
per share associated with a previously-announced joint venture
agreement between Parker Aerospace and GE Aviation, an operating
General Electric Company
), and restructuring expenses of approximately $100 million or 47
cents per share.
Parker's shares carry a Zacks Rank #3 (Hold). Other stocks in
the industry worth considering include
Manitex International, Inc.
). Manitex International has a Zacks Rank #1 (Strong Buy), while
Colfax Corporation carries a Zacks Rank #2 (Buy).
COLFAX CORP (CFX): Free Stock Analysis Report
GENL ELECTRIC (GE): Free Stock Analysis
MANITEX INT INC (MNTX): Free Stock Analysis
PARKER HANNIFIN (PH): Free Stock Analysis
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