Parker Hannifin Corporation, the global leader in motion and control technologies, has reported results for the fiscal 2019 first quarter ended September 30, 2018. Fiscal 2019 first quarter sales increased 3% to $3.48 billion compared with $3.36 billion in the prior year quarter. Net income increased 32% to $375.7 million compared with $285.4 million in the prior year quarter. Fiscal 2019 first quarter earnings per share increased 33% to $2.79, compared with $2.10 in the fiscal 2018 first quarter. On an adjusted basis, earnings per share increased 27% to $2.84, compared with adjusted earnings per share of $2.24 in the prior year quarter. Fiscal year to date net cash provided by operating activities was $159.4 million or 4.6% of sales. Excluding a $200 million discretionary pension contribution, operating cash flow was 10.3% of sales, compared with 7.1% of sales in the prior year period.
"This was an excellent start to fiscal 2019, reflecting benefits of our continued execution of the Win Strategy, which is driving record performance levels," says Chairman and Chief Executive Officer, Tom Williams. "Strong organic growth of 6% was consistent with our expectations, while sales were partially offset by higher unfavorable currency impact. We generated record segment operating margins for the company, which increased 140 basis points. All-time quarterly records for earnings per share, net income and return on sales further demonstrate that our actions are driving the consistent improvement of Parker's financial performance and reinforce our confidence in achieving another record year for sales and earnings."
First Quarter Fiscal 2019 Segment Results
Diversified Industrial Segment: North American first quarter sales increased 5% to $1.7 billion, and operating income increased 8% to $275.1 million compared with $256.0 million in the same period a year ago. While first quarter International sales were flat at $1.2 billion, operating income increased 8% to $206.1 million compared with $191.8 million in the fiscal 2018 first quarter.
Aerospace Systems Segment: First quarter sales were $564.5 million compared with $531.2 million in the prior year period, and operating income increased 42% to $109.9 million compared with $77.4 million in the same period a year ago.
Parker reported the following orders for the quarter ending September 30, 2018, compared with the same quarter a year ago:
- Orders increased 5% for total Parker
- Orders increased 8% in the Diversified Industrial North America businesses
- Orders increased 3% in the Diversified Industrial International businesses
- Orders increased 3% in the Aerospace Systems Segment on a rolling 12-month average basis
Outlook
For the fiscal year ending June 30, 2019, the company has revised guidance for earnings in the range of $10.90 to $11.50 per share, or $11.10 to $11.70 per share on an adjusted basis. Fiscal year 2019 guidance is adjusted on a pre-tax basis for expected business realignment expenses of approximately $22 million and CLARCOR costs to achieve of approximately $13 million. Guidance assumes organic sales growth in the range of 2.5% to 5.3%.
Williams adds, "With generally positive conditions across our end markets, and our ongoing commitment to the Win Strategy initiatives, the increase of our guidance at the operating line reflects the additional earnings achieved in the first quarter as well as our confidence in the outlook for the remainder of the year. Slightly offsetting this increase is higher tax expense for the rest of the year. We are very pleased with our first quarter performance as it reinforces our belief in achieving our fiscal 2023 performance goals."
