Parker Hannifin Corporation, the global leader in motion and control technologies, has reported results for the fiscal 2018 first quarter ended September 30, 2017. Fiscal 2018 first quarter sales increased 23% to $3.36 billion compared with $2.74 billion in the prior year quarter. Net income increased 36% to $285.5 million compared with $210.2 million in the prior year quarter. Fiscal 2018 first quarter earnings per share increased 36% to $2.10, compared with $1.55 in the fiscal 2017 first quarter. During the quarter, the company recognized a lower effective tax rate compared with the first quarter of fiscal 2017, due primarily to tax benefits related to stock option activity, resulting in a favorable impact to earnings of $0.12 per share. Earnings per share increased 40% to $2.24 when adjusted for business realignment expenses, CLARCOR costs to achieve and a loss related to the sale of an investment, compared with earnings per share of $1.61 in the prior year quarter, which was adjusted for business realignment expenses. Fiscal year to date, net cash provided by operating activities was $239.0 million or 7.1% of sales, compared with $113.9 million or 4.2% of sales in the prior year period. Operating cash to sales was 12.2% in the prior year period excluding discretionary pension contributions.
"This was a strong quarter reflecting growth greater than industrial production and margin expansion demonstrating the benefits of the new Win Strategy," says Chairman and Chief Executive Officer, Tom Williams. "This solid start to the year reinforces our projection of record sales and earnings for the full year."
First Quarter Fiscal 2018 Segment Results
Diversified Industrial Segment: North American first quarter sales increased 37% to $1.6 billion, and operating income increased 28% to $256.0 million compared with $200.6 million in the same period a year ago. International first quarter sales increased 22% to $1.2 billion, and operating income increased 40% to $191.8 million compared with $137.2 million in the same period a year ago.
Aerospace Systems Segment: First quarter sales were $531.2 million compared with $561.2 million in the prior year period, and operating income increased 6% to $77.4 million compared with $73.3 million in the same period a year ago.
Parker reported the following orders for the quarter ending September 30, 2017, compared with the same quarter a year ago:
- Orders increased 11% for total Parker
- Orders increased 10% in the Diversified Industrial North America businesses
- Orders increased 15% in the Diversified Industrial International businesses
- Orders increased 4% in the Aerospace Systems Segment on a rolling 12-month average basis
For the fiscal year ending June 30, 2018, the company has increased guidance for earnings from continuing operations to the range of $8.45 to $9.05 per share, or $9.10 to $9.70 per share on an adjusted basis. Fiscal year 2018 guidance is adjusted on a pre-tax basis for the reported loss on investment of approximately $14 million, expected business realignment expenses of approximately $58 million and CLARCOR costs to achieve of approximately $52 million.
Williams adds, "Through the combination of our sales growth, a lower cost structure, integration of CLARCOR, and the ongoing execution of the new Win Strategy initiatives, we expect to generate our best year ever in fiscal 2018."