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Parker-Hannifin (PH) Q4 Earnings Top, Revenues Miss Estimates

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Parker-Hannifin CorporationPH reported mixed results for fourth-quarter fiscal 2018 (ended June 2018).

Earnings/ Revenues

Quarterly adjusted earnings came in at $3.22 per share, up 31.4% year over year. The bottom line also outpaced the Zacks Consensus Estimate of $2.91.

Adjusted earnings for fiscal 2018 came in at $10.42 per share, higher than the year-ago tally of $8.11 per share. Also, the bottom line surpassed the Zacks Consensus Estimate of $10.10.

Revenues in the fiscal fourth quarter were $3,817.4 million, up 9.2% year over year. However, the top line fell short of the Zacks Consensus Estimate of $3,837 million. Revenues during the quarter improved 9% year over year organically.

Revenues for fiscal 2018 came in at $14.3 billion, up from $12 billion recorded in the year-ago period. However, the reported figure came in line with the Zacks Consensus Estimate.

Segmental Break-Up

Revenues in the North American segment in the fiscal fourth quarter came in at $1,804.9 million, up 8.4% year over year.

The company's International top-line performance improved 12.1% to $1,376.1 million in the reported quarter.

Revenues in the Aerospace Systems segment were $636.4 million, up 5.6% year over year.

Parker-Hannifin Corporation Price, Consensus and EPS Surprise

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

Costs/Margins

Cost of sales in the fiscal fourth quarter was $2,835.9 million, up 44.5% year over year. Selling, general and administrative expenses were $422.4 million, up from $402.4 million recorded in the year-ago quarter. Adjusted operating margin in Q4 was 17.5%, up 70 basis points (bps) year over year.

Balance Sheet/Cash Flow

Exiting fiscal 2018, Parker-Hannifin had cash and cash equivalents of $822.1 million, down from $884.9 million recorded as of Jun 30, 2017. Long-term debt stood at $4,318.6 million, down from $4,861.9 million recorded at the end of fiscal 2017.

In fiscal 2018, the company generated $1,600.3-million cash from operating activities, up from $1,302.5 million recorded in the comparable period last year. Capital expenditures totaled $2,46.7 million, up 21.6% year over year.

Full-year free cash-flow generation was $1.6 billion, up from $1.3 billion recorded in the year-earlier period.

Outlook

Parker-Hannifin intends to boost its near-term revenues and profitability on the back of its ongoing Win Strategy. The company anticipates generating adjusted earnings of $10.70-$11.50 per share in fiscal 2019. Organic revenue growth is predicted to lie within the 2.3-5.1% range.

Zacks Rank and Stocks to Consider

Parker-Hannifin currently carries a Zacks Rank #4 (Sell). Some better-ranked stocks in the Zacks Industrial Products sector are listed below:

Altra Industrial Motion Corp. AIMC currently sports a Zacks Rank #1 (Strong Buy). The company pulled off an average positive earnings surprise of 4.01% over the last four quarters. You can see the complete list of today's Zacks Rank #1 Rank stocks here .

Chart Industries, Inc. GTLS also flaunts a Zacks Rank of 1. The company recorded an average positive earnings surprise of 29.36% over the trailing four quarters.

Barnes Group, Inc. B holds a Zacks Rank #2 (Buy). The company came up with an average positive earnings surprise of 6.88% during the same time frame.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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