reported strong earnings for the fourth quarter and fiscal 2012.
Quarterly earnings were $1.95 a share, which was 2.1% above the
Zacks Consensus Estimate of $1.91 and up 9.5% year over
Profits were driven by the company's Win Strategy, which helped
it generate a record operating margin of 15% for the first time
since its inception, and strong performance of the Industrial
segment in North America.
For fiscal 2012, the company generated earnings of $7.45 a
share, which was 17% above the prior year earnings.
Parker-Hannifin posted sales of $3.4 billion, which were flat
year over year. Organic sales growth came in at 3% driven by
double-digit growth in the Industrial segment in North America.
However, currency translation adversely impacted sales by 4% in the
quarter, which was partially offset by 1% positive contribution
from acquisitions. Orders declined 1% year over year.
On a segment basis, revenues from the
segment in North America increased 9.0% to $1.34 billion.
Industrial International segment declined 10.4% year over year to
revenue increased 8.5% year over year to $566.0 million. Climate
and Industrial Controls segment revenues declined 3.0% to $268.5
Orders increased by 4% in the Industrial North America segment,
but declined 9% in Industrial International. Aerospace reported an
increase of 7% while Climate and Industrials Controls increased 1%
year over year.
Income and Expenses
Net income for the quarter was $302.3 million, an increase of
2.6% year over year. Total segment operating margin reached a
quarterly record of 15.5%, up from 14.8% in the previous quarter,
propelled by strong operating margin in Industrial North
SG&A expense was $386.6 million in the quarter compared with
$413.4 million in the fourth quarter of fiscal 2011.
Balance Sheet and Cash Flow
Exiting the year, the company had cash and cash equivalents of
$838.3 million compared to $657.5 million at the end of the prior
year. Long-term debt came in at $1.5 billion, down from $1.7
billion in the previous year.
The company generated cash flow from operations of $1.5 billion
during the fourth quarter of fiscal 2012 compared to cash flow from
operations of $1.2 billion in the year-ago period.
For fiscal 2013, the company expects earnings from continuing
operations in the range of $7.10 to $7.90 per diluted share.
The guidance includes an expected increase in domestic
qualified pension expense of approximately 35 cents per diluted
share due to accounting regulations which require the use of a
lower discount rate based on current market conditions.
Parker-Hannifin currently holds a Zacks Rank of # 3 which
implies a short term Hold recommendation on the stock.
PARKER HANNIFIN (PH): Free Stock Analysis
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