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Parker Extends Ties with Rolls-Royce

Zacks Equity Research

Recently, Parker-Hannifin Corporation (PH) announced that one of its operating segments - Parker Aerospace, has inked an agreement with Rolls-Royce, a premier global engine manufacturer, for its Trent series engine program. Parker expects to generate revenues of $2.2 billion over the tenure of this agreement, with its first component delivery scheduled in late 2013.

The Rolls-Royce-Trent XWB-97 engine will be used for Airbus’s new twinjet aircraft - A350 XWB (Xtra Wide Body)-1000. After the initial ground testing, Airbus intends to launch the maiden flight on the new twinjet in 2016.

Parker will offer complete hydraulic and fuel systems such as pneumatics valve suite, oil pump and hydraulic engine build-up system for the Trent XWB-97 engine. Additionally, as per Rolls-Royce’s TotalCare program, Parker will also be providing customer and support services on the engines throughout the tenure of the program.

The engine components will be designed, manufactured and supported by Parker Aerospace’s multiple divisions including Fluid Systems Division, Stratoflex Products Division and Gas Turbine Division.

With this contract, Parker has further strengthened its long-term ties with Rolls-Royce. We are encouraged by Parker’s strategy that enables it to continually focus on innovation and secure new contracts.

Parker is a leading worldwide full-line diversified manufacturer of motion and control technologies and systems, including fluid power systems, electromechanical controls and related components.

Parker currently has a Zacks Rank #3 (Hold). Other leading players in the industrial products sectors such as Graco Inc. (GGG), Kawasaki Heavy Industries Ltd.( KWHIY) and Middleby Corp. (MIDD) are worth considering. While Graco and Kawasaki both carry a Zacks Rank #1 (Strong Buy), Middleby carries a Zacks Rank #2 (Buy).

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