Parker-Hannifin (PH) Tops Q2 EPS by 64c, Revenues Beat; Raises FY21 EPS Guidance

Parker-Hannifin (NYSE: PH) reported Q2 EPS of $3.44, $0.64 better than the analyst estimate of $2.80. Revenue for the quarter came in at $3.41 billion versus the consensus estimate of $3.22 billion.

• Second quarter record net income of $447.3 million, EPS at $3.41 as reported, or $3.44 adjusted
• Second quarter record total segment operating margin of 17.4% as reported, or 20.4% adjusted
• Second quarter EBITDA margin was 23.1% as reported, or 20.8% adjusted
• Cash flow from operations was a Q2 YTD record at $1.35 billion, or 20.4% of sales
• Cumulative debt reduction reaches approximately $2.8 billion in the last 14 months
• Company increases fiscal 2021 EPS guidance midpoint to $12.15 as reported, or $13.90 adjusted
• “Parker team members continue to deliver outstanding results including many records in a challenging environment,” said Chairman and Chief Executive Officer, Tom Williams. “Our current results reflect the combined effect of significant operating performance improvement via The Win Strategy™ and strategic acquisitions that have strengthened our portfolio. We achieved second quarter records in total segment operating margin, earnings and year-to-date operating cash flow. We also delivered better than expected organic sales reflecting a more resilient business portfolio and strong performance in our Diversified Industrial segment. This was also the first quarter since September 2018 that industrial order rates were positive. Second quarter adjusted segment operating margin increased 250 basis points year over year and adjusted EBITDA margin increased 230 basis points compared with the prior year quarter.”

GUIDANCE:

Parker-Hannifin sees FY2021 EPS of $13.65-$14.15, versus the consensus of $13.93.

For the fiscal year ending June 30, 2021, the company has increased guidance for earnings per share to the range of $11.90 to $12.40, or $13.65 to $14.15 on an adjusted basis. Guidance assumes an organic sales decline in the range of (4.5%) to (2.5%). Fiscal year 2021 guidance is adjusted on a pre-tax basis for expected business realignment expenses of approximately $60 million, costs to achieve of approximately $15 million, acquisition-related intangible asset amortization of approximately $322 million and a gain on the sale of land of approximately $101 million. A reconciliation of forecasted earnings per share to adjusted forecasted earnings per share is included in the financial tables of this press release.

Williams added, “Our performance in the first half of this year has exceeded our expectations, and as a result, we are increasing our full year guidance for fiscal 2021. While the outlook for key end markets continues to be uncertain in the current environment, we remain committed to driving improvements through the execution of the Win Strategy and making continued progress toward our long-term financial goals."

For earnings history and earnings-related data on Parker-Hannifin (PH) click here.

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