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Parker-Hannifin (PH) Q4 Earnings Top Estimates, Decrease Y/Y
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Parker-Hannifin Corporation (PH - Free Report) has reported better-than-expected earnings results for the fourth quarter of fiscal 2020 (ended Jun 30, 2020), with a beat of 73.5%. Also, its sales surpassed estimate by 10.2%.
The company’s adjusted earnings were $2.55 per share in the quarter, surpassing the Zacks Consensus Estimate of $1.47. However, earnings declined 23% from the year-ago quarter’s $3.31 per share.
For fiscal 2020, the company’s adjusted earnings were $10.79 per share, down 8.9% year over year.
Revenue Details
In the quarter under review, the company’s net sales were $3,160.6 million, reflecting a 14.1% year-over-year decline. Organic sales in the quarter declined 21% year over year. Orders were down 22% in the quarter.
Notably, the company’s top line surpassed the Zacks Consensus Estimate of $2,867 million.
For fiscal 2020, net sales were $13,695.5 million, reflecting a 4.4% year-over-year decline.
Parker-Hannifin reports revenues under two segments. A brief discussion on the quarterly results is provided below:
The Diversified Industrial segment’s revenues totaled $2,536.7 million, representing 80.3% of net revenues in the quarter under review. On a year-over-year basis, the segment’s revenues decreased 15.5% year over year.
It is worth mentioning that the segment’s revenues generated in North America totaled $1,440.2 million, decreasing 17.5% year over year. Also, the segment’s International revenues were $1,096.4 million, down 12.9% year over year. Orders in the quarter decreased 29% year over year for Diversified Industrial North America and that for Diversified Industrial International fell 21%.
The Aerospace Systems segment generated revenues of $624 million, accounting for 19.7% of net revenues in the reported quarter. Sales fell 8% year over year. Orders in the quarter decreased 5% year over year.
ParkerHannifin Corporation Price, Consensus and EPS Surprise
In the reported quarter, the company’s cost of sales decreased 14% year over year at $2,357.3 million. It represented 74.6% of the quarter’s net sales versus 74.4% in the year-ago quarter. Selling, general and administrative expenses decreased 9.8% year over year to $352.7 million. It represented 11.2% of net sales in the reported quarter versus 10.6% in the year-ago quarter.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter decreased 6.8% year over year to $646.2 million. Adjusted EBITDA margin expanded 160 bps to 20.4%. Interest expenses in the quarter increased 48.7% year over year to $74.5 million.
Balance Sheet & Cash Flow
Exiting fiscal 2020, Parker-Hannifin had cash and cash equivalents of $685.5 million, down 1.7% from $697.6 million recorded in the last reported quarter. Long-term debt was down 5.5% sequentially to $7,652.3 million.
In fiscal 2020, the company generated net cash of $2,070.9 million from operating activities, reflecting growth of 19.7% from the year-ago period. Capital spending totaled $232.6 million versus $195.1 million in the year-ago period.
In fiscal 2020, the company paid out cash dividends of $453.8 million, up 10% on a year-over-year basis.
Outlook
Parker-Hannifin intends to boost its near-term revenues and profitability on the back of its Win Strategy. For fiscal 2021 (ending June 2021), the company anticipates generating adjusted earnings of $9.80-$10.80 per share.
AptarGroup delivered an earnings surprise of 5.62%, on average, in the trailing four quarters.
Avery Dennison delivered an earnings surprise of 7.70%, on average, in the trailing four quarters.
Cintas delivered an earnings surprise of 9.09%, on average, in the trailing four quarters.
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Parker-Hannifin (PH) Q4 Earnings Top Estimates, Decrease Y/Y
Parker-Hannifin Corporation (PH - Free Report) has reported better-than-expected earnings results for the fourth quarter of fiscal 2020 (ended Jun 30, 2020), with a beat of 73.5%. Also, its sales surpassed estimate by 10.2%.
The company’s adjusted earnings were $2.55 per share in the quarter, surpassing the Zacks Consensus Estimate of $1.47. However, earnings declined 23% from the year-ago quarter’s $3.31 per share.
For fiscal 2020, the company’s adjusted earnings were $10.79 per share, down 8.9% year over year.
Revenue Details
In the quarter under review, the company’s net sales were $3,160.6 million, reflecting a 14.1% year-over-year decline. Organic sales in the quarter declined 21% year over year. Orders were down 22% in the quarter.
Notably, the company’s top line surpassed the Zacks Consensus Estimate of $2,867 million.
For fiscal 2020, net sales were $13,695.5 million, reflecting a 4.4% year-over-year decline.
Parker-Hannifin reports revenues under two segments. A brief discussion on the quarterly results is provided below:
The Diversified Industrial segment’s revenues totaled $2,536.7 million, representing 80.3% of net revenues in the quarter under review. On a year-over-year basis, the segment’s revenues decreased 15.5% year over year.
It is worth mentioning that the segment’s revenues generated in North America totaled $1,440.2 million, decreasing 17.5% year over year. Also, the segment’s International revenues were $1,096.4 million, down 12.9% year over year. Orders in the quarter decreased 29% year over year for Diversified Industrial North America and that for Diversified Industrial International fell 21%.
The Aerospace Systems segment generated revenues of $624 million, accounting for 19.7% of net revenues in the reported quarter. Sales fell 8% year over year. Orders in the quarter decreased 5% year over year.
ParkerHannifin Corporation Price, Consensus and EPS Surprise
ParkerHannifin Corporation price-consensus-eps-surprise-chart | ParkerHannifin Corporation Quote
Margin Profile
In the reported quarter, the company’s cost of sales decreased 14% year over year at $2,357.3 million. It represented 74.6% of the quarter’s net sales versus 74.4% in the year-ago quarter. Selling, general and administrative expenses decreased 9.8% year over year to $352.7 million. It represented 11.2% of net sales in the reported quarter versus 10.6% in the year-ago quarter.
Adjusted earnings before interest, tax, depreciation and amortization (EBITDA) in the quarter decreased 6.8% year over year to $646.2 million. Adjusted EBITDA margin expanded 160 bps to 20.4%. Interest expenses in the quarter increased 48.7% year over year to $74.5 million.
Balance Sheet & Cash Flow
Exiting fiscal 2020, Parker-Hannifin had cash and cash equivalents of $685.5 million, down 1.7% from $697.6 million recorded in the last reported quarter. Long-term debt was down 5.5% sequentially to $7,652.3 million.
In fiscal 2020, the company generated net cash of $2,070.9 million from operating activities, reflecting growth of 19.7% from the year-ago period. Capital spending totaled $232.6 million versus $195.1 million in the year-ago period.
In fiscal 2020, the company paid out cash dividends of $453.8 million, up 10% on a year-over-year basis.
Outlook
Parker-Hannifin intends to boost its near-term revenues and profitability on the back of its Win Strategy. For fiscal 2021 (ending June 2021), the company anticipates generating adjusted earnings of $9.80-$10.80 per share.
Zacks Rank & Stocks to Consider
The company currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks are AptarGroup, Inc. (ATR - Free Report) , Avery Dennison Corporation (AVY - Free Report) and Cintas Corporation (CTAS - Free Report) . While AptarGroup currently sports a Zacks Rank #1 (Strong Buy), Avery Dennison and Cintas carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AptarGroup delivered an earnings surprise of 5.62%, on average, in the trailing four quarters.
Avery Dennison delivered an earnings surprise of 7.70%, on average, in the trailing four quarters.
Cintas delivered an earnings surprise of 9.09%, on average, in the trailing four quarters.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2021.
Click here for the 6 trades >>