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Parker-Hannifin's (PH) Q2 Earnings & Revenues Top Estimates

Zacks Equity Research

Parker-Hannifin Corporation PH reported better-than-expected results for second-quarter fiscal 2020 (ended December 2019), wherein both earnings and revenues beat estimates.

Earnings/Revenues

Quarterly adjusted earnings came in at $2.54 per share, up 1.2% year over year from $2.51. Also, the bottom line outpaced the Zacks Consensus Estimate of $2.29.

Parker-Hannifin Corporation Price, Consensus and EPS Surprise

Parker-Hannifin Corporation Price, Consensus and EPS Surprise

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

Revenues for the fiscal second quarter were about $3,498 million, up 0.7% year over year. Moreover, the top line beat the consensus estimate of $3,464 million.

Segmental Breakup

North American segment’s revenues came in at $1,615.9 million, down 1% year over year.

International’s top-line figure declined 6.3% to $1,147.1 million.

Aerospace Systems generated revenues of $735 million, up 19.3%.

Costs/Margins

Cost of sales in the fiscal second quarter was $2,682.8 million, up 3.1% year over year. Selling, general and administrative expenses were $491.1 million, up from $397.3 million. Adjusted operating margin was 15.8%, down 80 basis points.

Balance Sheet/Cash Flow

Exiting the fiscal second quarter, Parker-Hannifin had cash and cash equivalents of $948.4 million, down from $3,219.8 million recorded on Jun 30, 2019. At the end of the reported quarter, long-term debt was $8,141.2 million compared with $6,520.8 million as of Jun 30, 2019.

In first six months of fiscal 2020, the company generated about $826 million cash from operating activities, up from $541 million in the first six months of fiscal 2019.

Outlook

Parker-Hannifin intends to boost its near-term revenues and profitability on the back of its Win Strategy. The company revised earnings view for fiscal 2020 to $10.25-$10.85 from $10.10-$10.90 per share.

Zacks Rank & Stocks to Consider

Parker-Hannifin currently has a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Zacks Industrial Products sector are Barnes Group, Inc. B, Berry Global Group, Inc. BERY Cintas Corporation CTAS. All these companies carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Barnes Group delivered positive earnings surprise of 4.21%, on average, in the trailing four quarters.

Berry Global delivered positive earnings surprise of 0.70%, on average, in the trailing four quarters.

Cintas pulled off positive earnings surprise of 8.50%, on average, in the trailing four quarters.

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