Parker Hannifin Corporation, the global leader in motion and control technologies, has reported results for the fiscal 2019 third quarter ended March 31, 2019. Fiscal 2019 third quarter sales were $3.69 billion compared with $3.75 billion in the prior year quarter. Organic growth of 2% was more than offset by currency translation and a divestiture in fiscal year 2018. Net income increased 12% to an all-time quarterly record of $411.2 million compared with $366.0 million in the third quarter of fiscal 2018. Fiscal 2019 third quarter earnings per share increased 16% to $3.14, compared with $2.70 in the prior year quarter. Adjusted earnings per share were $3.17, compared with adjusted earnings per share of $2.80 in the prior year quarter. Cash flow from operations for the first nine months of fiscal 2019 was $1,092.6 million or 10.3% of sales, compared with $901.2 million or 8.6% of sales in the prior year period. Excluding a discretionary pension contribution in fiscal 2019, cash flow from operations for the first nine months of fiscal 2019 was 12.1% of sales.
“We delivered strong operational performance in the third quarter, achieving all-time quarterly records for total segment operating margin and earnings, and strong year-to-date cash flow from operations,” says Chairman and Chief Executive Officer, Tom Williams. “We eclipsed total segment operating margin of 17% for the first time in a quarter. I am especially pleased that our Aerospace business achieved an all-time record for segment operating margin of 20.7%. While order entry has moderated for the Diversified Industrial Segment against strong comparisons in the prior year quarter, we are confident in our ability to continue executing well and reaching another record year in fiscal 2019.”
Segment Results
Diversified Industrial Segment: North American third quarter sales decreased 1% to $1.8 billion, and operating income increased 2% to $287.5 million compared with $280.7 million in the same period a year ago. International third quarter sales decreased 8% to $1.3 billion, impacted primarily by unfavorable currency translation, while operating income increased 2% to $208.7 million compared with $205.3 million in the same period a year ago.
Aerospace Systems Segment: Third quarter sales increased 9% to $652.1 million, and operating income increased 26% to $134.8 million compared with $106.7 million in the same period a year ago.
Parker reported the following orders for the quarter ending March 31, 2019, compared with the same quarter a year ago:
- Orders decreased 4% for total Parker
- Orders decreased 6% in the Diversified Industrial North America businesses
- Orders decreased 4% in the Diversified Industrial International businesses
- Orders increased 2% in the Aerospace Systems Segment on a rolling 12-month average basis
Outlook
For the fiscal year ending June 30, 2019, the company has maintained guidance for earnings from continuing operations in the range of $11.17 to $11.47 per share, or $11.45 to $11.75 per share on an adjusted basis. Fiscal year 2019 guidance is adjusted on a pre-tax basis for expected business realignment expenses of approximately $16 million and CLARCOR costs to achieve of approximately $14 million and an income tax expense adjustment of $14 million related to U.S. Tax Reform. Guidance assumes organic sales growth in the range of 2.0% to 3.0%.
Williams adds, “Parker continues to operate exceptionally well, with strong execution from Parker team members globally. We remain on track to achieve our fiscal 2023 financial targets through our ongoing focus on driving The Win Strategy.”
