Parker Reports Record Third Quarter Sales

Parker reports record numbers for fiscal 2011 third quarter sales and net income, and increases dividend 16%.

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Parker Hannifin Corporation, a provider of motion and control technologies, reported record results for the fiscal 2011 third quarter ended March 31, 2011. Fiscal 2011 third quarter sales were $3.2 billion, a third quarter record representing an increase of 23.9% from $2.6 billion in the same quarter a year ago. Net income was an all-time quarterly record of $281.6 million, an increase of 82.4% from $154.4 million in the third quarter of fiscal 2010. Earnings per diluted share for the quarter were also an all-time quarterly record at $1.68, compared with $0.94 in last year's third quarter. Cash flow from operations for the first nine months of fiscal 2011 was $799.9 million, or 9.0% of sales, compared with cash flow from operations of $841.4 million, or 11.7% of sales in the prior year period.

"Our third quarter performance reflects the continued strength that we see across our end markets and regions and our ability to leverage that strength into higher operating margins and record quarterly earnings per share," says Chairman, CEO and President Don Washkewicz. "Customer orders also increased significantly in the quarter. All segments reported a double-digit increase in sales and order levels. Total organic sales increased 21% in the quarter with acquisitions contributing 1% and currency contributing 2%. Margin performance was also a positive as total segment operating margin was a third quarter record of 14.8%, led by Industrial North America segment margin of 16.1% and Industrial International segment margin of 15.5%. Further reflecting our continued strong balance sheet and cash flow, the Board of Directors today approved a 16% increase in our quarterly dividend from 32 cents to 37 cents per common share."

Segment Results

In the Industrial North America segment, third quarter sales increased 23.0% to $1.2 billion, and operating income was $189.5 million compared with $133.6 million in the same period a year ago. 

In the Industrial International segment, third quarter sales increased 29.9% to $1.3 billion, and operating income was $199.8 million compared with $109.3 million in the same period a year ago. 

In the Aerospace segment, third quarter sales increased 12.1% to $503.8 million, and operating income was $69.0 million compared with $49.8 million in the same period a year ago.

In the Climate and Industrial Controls segment, third quarter sales increased 24.9% to $264.5 million, and operating income was $22.6 million compared with $16.3 million in the same period a year ago.    

Orders

Parker reported an increase of 24% in total orders for the quarter ended March 31, 2011, compared with the same quarter a year ago. The company reported the following orders by operating segment:  

  • Orders increased 20% in the Industrial North America segment, compared with the same quarter a year ago
  • Orders increased 22% in the Industrial International segment, compared with the same quarter a year ago
  • Orders increased 44% in the Aerospace segment on a rolling 12-month average basis.
  • Orders increased 14% in the Climate and Industrial Controls segment, compared with the same quarter a year ago

Outlook

For fiscal 2011, the company has increased guidance for earnings from continuing operations from the previous range of $5.80 to $6.20 per diluted share to a new range of $6.20 to $6.40 per diluted share.

Washkewicz adds, "Our performance year-to-date reflects the ongoing economic recovery and the continued execution of our Win Strategy, now in its tenth year. Parker continues to position itself favorably for continued earnings growth by focusing on premier service to our customers, lean operations and ongoing investments in leading edge innovations across the company. Parker expects to deliver record earnings in fiscal 2011, with a strong order backlog going into fiscal year 2012."  

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