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Parker-Hannifin (PH) to Report Q1 Earnings: Beat in Store?

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Zacks Equity Research
·4 min read
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Parker-Hannifin Corporation PH is slated to report first-quarter fiscal 2021 (ended September 2020) results on Nov 5, before market open.

The company pulled off a positive earnings surprise of 29.54%, on average, in the last four quarters, beating estimates all through. Parker-Hannifin’s fourth-quarter fiscal 2020 (ended June 2020) adjusted earnings of $2.55 per share outpaced the Zacks Consensus Estimate of $1.47 by 73.5%.

In the past three months, the company’s shares have gained 20.3% compared with 3.3% growth recorded by the industry it belongs to.

Factors at Play

Parker-Hannifin is anticipated to have benefited from strength in its military, material handling, mining, telecommunications and refrigeration end markets. Also, the company’s unique Win Strategy and growth-based investments are likely to have been beneficial in the fiscal first quarter.

Also, buyouts had a contribution of 9.3% and 8.1% to the company’s sales in third (ended March 2020) and fourth quarters of fiscal 2020. This trend is likely to have continued in the to-be-reported quarter as well, given strength across the company’s LORD Corporation and Exotic Metals Forming acquired assets. Notably, the company’s buyout of LORD Corporation (completed in October 2019) has been strengthening its engineered materials’ product and solutions offerings. Moreover, its Exotic Metals Forming buyout has been augmenting its aerospace products and solutions with unique products and proprietary manufacturing capabilities.

In addition, several cost-control actions taken by the company, including the reduction of discretionary expenses, salary and capital expenditure, are expected to have helped it maintain a healthy margin.

However, market-downturn caused by the coronavirus pandemic, particularly at commercial, construction, machine tools, rail and oil and gas space are likely to have adversely impacted its top-line performance in the to-be-reported quarter. Notably, the crisis along with the impacts of the governmental regulations imposed in response to the crisis might have had a bearing on the company’s performance.

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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Earnings ESP: The company has an Earnings ESP of +5.44% as the Most Accurate Estimate is pegged at $2.41, higher than the Zacks Consensus Estimate of $2.29.

Parker-Hannifin Corporation Price and EPS Surprise

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

Parker-Hannifin Corporation price-eps-surprise | Parker-Hannifin Corporation Quote

Zacks Rank: Parker-Hannifin carries a Zacks Rank #2.

Other Key Picks

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

Nordson Corporation NDSN has an Earnings ESP of +1.96% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

II-VI Incorporated IIVI has an Earnings ESP of +2.38% and a Zacks Rank #3.

The Middleby Corporation MIDD has an Earnings ESP of +7.84% and a Zacks Rank of 3.

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ParkerHannifin Corporation (PH) : Free Stock Analysis Report
 
IIVI Incorporated (IIVI) : Free Stock Analysis Report
 
Nordson Corporation (NDSN) : Free Stock Analysis Report
 
The Middleby Corporation (MIDD) : Free Stock Analysis Report
 
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