Parker Hannifin Corp Earnings: Falling Costs Drives Margin Growth as Profit Rises

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S&P 500 (NYSE:SPY) component Parker Hannifin Corporation (NYSE:PH) reported its results for the fourth quarter. Parker Hannifin manufactures motion and control technologies and systems, including electromechanical controls, fluid power systems, and related components.

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Parker Hannifin Corporation Earnings Cheat Sheet

Results: Net income for Parker Hannifin Corporation rose to $302 million ($1.96 per share) vs. $292.2 million ($1.79 per share) in the same quarter a year earlier. This marks a rise of 3.3% from the year-earlier quarter.

Revenue: Remained constant at $3.41 billion.

Actual vs. Wall St. Expectations: Parker Hannifin Corporation beat the mean analyst estimate of $1.91 per share. It beat the average revenue estimate of $3.28 billion.

Quoting Management: “I am very pleased that we were able to achieve record performance in fiscal year 2012, despite moderate growth in the global economy,” said Chairman, CEO and President, Don Washkewicz. “Of particular note, we surpassed 15 percent annual total segment operating margin for the first time in our history, which is a target we set when we initiated the Win Strategy.”

Key Stats:

The company has now seen its net income increase for three consecutive quarters. In the third quarter, net income rose 11.6% and in the second quarter, the figure rose 4.6%.

The company has beaten estiamtes for two quarters in a row. In the third quarter, it topped expectations with net income of $2.01 versus a mean estimate of net income of $1.72 per share.

Margins rose in the third quarter after falling the quarter before. Gross margins grew to 24.6%, up 0.6 percentage point from the year-earlier quarter. In the second quarter, the figure rose 0.3 percentage point to 23.7% from the year earlier quarter.

Over the last five quarters, revenue has increased 10% on average year-over-year. The biggest increase came in the fourth quarter of the last fiscal year, when revenue rose 22.4% from the year-earlier quarter.

Looking Forward: Expectations for the company’s next-quarter results are lower than they have been. Over the past sixty days, the average estimate for first quarter of the next fiscal year has fallen from $2.06 per share to $1.93. For the fiscal year, the average estimate has moved up from $7.11 a share to $7.39 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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