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PH Underperforms Estimate

Zacks Equity Research

Parker-Hannifin (PH) reported its first-quarter fiscal 2013 earnings results before the market opened today. Earnings per share were $1.57 in the reported quarter, below the Zacks Consensus Estimate of $1.73. Earnings for the quarter declined by 34 cents year over year.

Total Revenue

Total revenue was $3.21 billion, down from $3.23 billion in the prior-year quarter. Weak international market and not very good returns from the American market affected revenue in the quarter.

The company reported a revenue increase in three of its four segments. 

Segment Performance

Industrial North America segmentsalesclimbed 5.1% year over year to $1.27 billion. Industrial International segment sales were down by 8.7% to $1.18 billion. Aerospace revenue was $541.1 million for the quarter, up 8.8% year over year. While, Climate and Industrial Controls segment decreased by 4.8% to $230.9 million.

Income & Expenses

Net income was $239.7 million compared with $297.0 million in the prior-year quarter. Selling, general and administrative expenses were $381.1 million compared with $386.5 million.  

Balance Sheet

Cash and cash equivalents were $436.1 million with long-term debt of $1.5 billion and share owners’ equity of $5.1 billion.

Moving Ahead

The company revised its guidance for earnings from continuing operations to the range of $6.15 to $6.75 per diluted share, down from the prior guidance of $7.10 to $7.90 per diluted share.

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

The company is also a leading worldwide producer of fluid purification, fluid and fuel control, process instrumentation, air conditioning, refrigeration, electromagnetic shielding and thermal management products and systems. The major competitors of Honeywell are Eaton Corporation (ETN), Emerson Electric Co. (EMR) and Honeywell International Inc. (HON).

We continue to maintain a Neutral rating on Parker-Hannifin for the long term. The company has a Zacks #3 Rank (Hold recommendation) over the next one-to-three months.

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