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Parker-Hannifin (PH) to Post Q3 Earnings: Is a Beat in Store?

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Parker-Hannifin Corporation PH is slated to report third-quarter fiscal 2021 (ended March 2021) results on Apr 29, before market open.

The company pulled off a surprise of 42.26%, on average, in the last four quarters, beating on earnings all through. Parker-Hannifin’s second-quarter fiscal 2021 (ended December 2020) adjusted earnings of $3.44 per share outpaced the Zacks Consensus Estimate of $2.60 by 32.31%.

In the past three months, shares of the company have gained 20.3% compared with 15.7% growth of the industry it belongs to.

Factors at Play

Parker-Hannifin is expected to have benefited from strength in its semiconductor, life science, power generation, agriculture and refrigeration end markets. Also, the company’s unique Win Strategy and growth-based investments are likely to have been beneficial in the fiscal third quarter.

Also, several cost-control actions taken by the company including the reduction of discretionary expenses, are expected to have helped it maintain a healthy margin performance.

Moreover, the buyouts were accretive to the company’s sales in the second quarter of fiscal 2021. This trend is likely to have continued in the to-be-reported quarter as well, given strength across the company’s acquired assets of LORD Corporation and Exotic Metals Forming. Notably, the company’s acquisition of LORD Corporation (completed in October 2019) has been strengthening its engineered materials’ product and solutions offerings for a while now. Moreover, its Exotic Metals Forming takeover is steadily complementing its aerospace products and solutions.

However, the coronavirus outbreak-led market downturn, particularly at aerospace end market is likely to have adversely impacted its top-line performance in the fiscal third quarter. In addition, expenses related to its realignment program might have also affected the company’s profitability.

Against this backdrop, the Zacks Consensus Estimate for third-quarter fiscal 2021 revenues for the Aerospace segment is pegged at $605 million, indicating a drop of 18.7% from the year-ago quarter’s reported number. The consensus estimate for revenues for the North America operations of the Diversified Industrial segment stands at $1,738 million, indicating a 2.1% decline from the year-ago quarter reported figure. The consensus mark of $1,337 million for International operations of the Diversified Industrial segment indicates a year-over-year increase of 13.1%.

Earnings Whispers

Our proven model suggests an earnings beat for Parker-Hannifin this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here as elaborated below. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: Parker-Hannifin has an Earnings ESP of +1.04% as the Most Accurate Estimate is pegged at $3.79, higher than the Zacks Consensus Estimate of $3.75.

ParkerHannifin Corporation Price and EPS Surprise

ParkerHannifin Corporation Price and EPS Surprise
ParkerHannifin Corporation Price and EPS Surprise

ParkerHannifin Corporation price-eps-surprise | ParkerHannifin Corporation Quote

Zacks Rank: Parker-Hannifin currently carries a Zacks Rank #3.

Other Key Picks

Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to deliver an earnings beat this season:

Emerson Electric Co. EMR has an Earnings ESP of +3.62% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Enersys ENS has an Earnings ESP of +0.78% and a Zacks Rank #3, currently.

Eaton Corporation, plc ETN has an Earnings ESP of +1.96% and is presently Zacks #3 Ranked.

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