Parker Hannifin Corporation, the global leader in motion and control technologies, reports results for the fiscal 2017 fourth quarter and full year ended June 30, 2017. Fiscal 2017 fourth quarter sales increased 18% to $3.50 billion compared with $2.96 billion in the prior year quarter. Net income increased 21% to $293.4 million compared with $241.9 million in the prior year quarter. Fiscal 2017 fourth quarter earnings per share increased 21% to $2.15, compared with $1.77 in the fiscal 2016 fourth quarter. Earnings per share increased 29% to $2.45 when adjusted for pre-tax expenses of $21.4 million for business realignment and $36.3 million related to acquisitions, compared with $1.90 in the prior year quarter, which was adjusted for pre-tax business realignment expenses of $25.1 million.
For the full year, fiscal 2017 sales were $12.0 billion, a 6% increase compared with $11.4 billion in fiscal 2016. Net income for fiscal 2017 was $983.8 million, a 22% increase compared with $807.2 million in fiscal 2016. Fiscal 2017 earnings per share were $7.25, a 23% increase compared with $5.89 per share in fiscal 2016. Earnings per share increased 26% to $8.11, when adjusted for pre-tax expenses of $56.4 million for business realignment and $103.1 million related to acquisitions, compared with $6.46 in the prior year quarter, which was adjusted for pre-tax business realignment expenses of $109.0 million. During the year, the company completed the sale of the Autoline product line which resulted in a pre-tax gain of $45.0 million or $0.21 per share.
Cash flow from operations for fiscal year 2017 was $1.3 billion or 10.8% of sales, compared with $1.2 billion or 10.7% of sales in the prior year period. Excluding discretionary pension contributions, full year cash flow from operations was 12.7% of sales compared with 12.4% of sales in the prior year period, and fiscal year 2017 free cash flow conversion was 134%.
"Our fourth quarter performance was outstanding and capped a year in which we made tremendous progress with actions that are driving significant long-term shareholder value and financial performance," says Chairman and Chief Executive Officer, Tom Williams. "By focusing on the initiatives detailed in the new Win Strategy we have delivered record fourth quarter earnings per share and robust adjusted total segment operating margin performance of 16.8%. Orders grew for the fourth consecutive quarter, as we see continued signs of demand improving in key end markets and regions. This was also a transformative year for our portfolio as we acquired CLARCOR, resulting in a significant increase to our filtration business and the aftermarket mix of Parker. My thanks to our global team members for their dedication to generating such exceptional results."
Fourth Quarter Fiscal 2017 Segment Results
Diversified Industrial Segment: North American fourth quarter sales increased 32% to $1.7 billion, and operating income increased 18% to $261.5 million compared with $221.2 million in the same period a year ago. International fourth quarter sales increased 12% to $1.2 billion, and operating income increased 36% to $161.5 million compared with $118.6 million in the same period a year ago.
Aerospace Systems Segment: Fourth quarter sales were $602.8 million, compared with $602.4 million in the prior year period, and operating income increased 15% to $111.7 million compared with $97.5 million in the same period a year ago.
Parker reported the following orders for the quarter ending June 30, 2017, compared with the same quarter a year ago:
- Orders increased 8% for total Parker
- Orders increased 10% in the Diversified Industrial North America businesses
- Orders increased 10% in the Diversified Industrial International businesses
- Orders increased 1% in the Aerospace Systems Segment on a rolling 12-month average basis
For the fiscal year ending June 30, 2018, the company has issued guidance for earnings from continuing operations in the range of $7.88 to $8.58 per share, or $8.45 to $9.15 per share on an adjusted basis. Fiscal year 2018 guidance is adjusted on a pre-tax basis for expected business realignment expenses of approximately $58 million and CLARCOR costs to achieve of approximately $52 million.
Williams adds, "Looking ahead to fiscal year 2018, we are anticipating a record year as we continue to operate with the benefit of stronger market conditions for the full year, a lower fixed cost structure, and the strategic addition of CLARCOR to our portfolio. Our focus remains on further advancing the new Win Strategy initiatives and progressing towards top quartile financial performance compared with our proxy peers, placing Parker among the best performing diversified industrial companies in the world."