Parker-Hannifin Corporation (PH Quick QuotePH - Free Report) reported fourth-quarter fiscal 2024 (ended Jun 30, 2024) adjusted earnings (excluding 76 cents from non-recurring items) of $6.77 per share, which beat the Zacks Consensus Estimate of $6.23. The bottom line jumped 11% year over year.

Total sales of $5.19 billion surpassed the consensus estimate of $5.10 billion. The top line increased 1.8% year over year. Strength across businesses and operational improvement drove the top line. Organic sales grew 3% year over year. Orders grew 1% year over year.

Segmental Details

The Diversified Industrial segment’s sales totaled $3.66 billion, representing 70.5% of total sales. On a year-over-year basis, the segment’s sales decreased 4.1%.

Sales from the Diversified Industrial North America totaled $2.23 billion, down 3.2% year over year. The Zacks Consensus Estimate was pegged at $2.20 billion. Diversified International sales were $1.43 billion, down 5.4% year over year. The consensus mark was also pegged at $1.43 billion.

Orders for Diversified Industrial North America were flat while Diversified Industrial International orders declined 1% on a year-over-year basis.

The Aerospace Systems segment generated sales of $1.53 billion, which accounted for 29.5% of total sales. Sales jumped 19.2% year over year, thanks to strong growth in orders. The Zacks Consensus Estimate was pegged at $1.43 billion. Orders for the Aerospace Systems unit increased 7% on a year-over-year basis.

Margin Profile

Parker-Hannifin’s cost of sales increased 1.8% year over year to $3.32 billion. Selling, general and administrative expenses decreased 2% from the prior year to $818.3 million.

Adjusted total segment operating income increased 7.4% year over year to $1.31 billion. Adjusted total segment operating margin increased 130 basis points year over year to 25.3%.

Balance Sheet & Cash Flow

Exiting the fiscal fourth quarter, Parker-Hannifin had cash and cash equivalents of $422 million compared with $475.2 million at the end of fiscal 2023. Long-term debt was $7.16 billion compared with $8.80 billion at the end of fiscal 2023.

In fiscal 2024, Parker-Hannifin generated net cash of $3.38 billion from operating activities compared with $2.98 billion in the year-ago period.

Capital spending totaled $400.1 million in fiscal 2024 compared with $380.7 million in the year-ago period.

Parker-Hannifin paid out cash dividends of $782 million, up 11.1% year over year.

Fiscal 2025 Guidance Issued

Parker-Hannifin expects total sales to increase in the band of 1.5-4.5% year over year.  Organic sales are projected to increase in the range of 2-5%. Its total segment operating margin is estimated to be in the range of 22.1-22.5% (25.2-25.6% on an adjusted basis).

Parker-Hannifin currently expects adjusted earnings to be in the band of $26.30-$27.00 per share ($22.65-$23.35 on a reported basis).

Zacks Rank and Key Picks

PH currently carries a Zacks Rank #3 (Hold). Here are some better-ranked stocks from the same space:

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It has a trailing four-quarter average earnings surprise of 10.3%. 

The Zacks Consensus Estimate for ALLE’s 2024 earnings has increased 1.1% in the past 60 days.

Flowserve Corporation (FLS Quick QuoteFLS - Free Report) currently carries a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 18.2%.

In the past 60 days, the consensus estimate for Flowserve’s 2024 earnings has increased 3%.

AptarGroup, Inc. (ATR Quick QuoteATR - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 7.2%.

In the past 60 days, the Zacks Consensus Estimate for ATR’s 2024 earnings has remained stable.