Summary
Parker-Hannifin Corporation (PH) reported its third-quarter and year-to-date results for the period ending March 31, 2013. The company experienced a decline in net sales and net income compared to the prior-year period, largely driven by softer demand in its Industrial International businesses and the Climate & Industrial Controls segment. Despite these headwinds, the Aerospace segment showed growth. Significant acquisitions during the period provided a substantial boost to revenue, offsetting some of the organic sales decline. However, gross profit margins were impacted by increased benefit costs and operating inefficiencies. Management remains focused on cost structure adjustments, maintaining a strong balance sheet, and pursuing strategic growth opportunities in key sectors like energy, water, and transportation.
Financial Highlights
53 data points| Revenue | $3.31B |
| Cost of Revenue | $2.57B |
| Gross Profit | $737.85M |
| SG&A Expenses | $379.69M |
| Operating Income | $462.76M |
| Interest Expense | $23.05M |
| Net Income | $256.56M |
| EPS (Basic) | $1.72 |
| EPS (Diluted) | $1.68 |
| Shares Outstanding (Basic) | 149.29M |
| Shares Outstanding (Diluted) | 152.36M |
Key Highlights
- 1Net sales decreased by 2.5% for the quarter and 1.5% for the nine months ended March 31, 2013, compared to the prior year, primarily due to lower volumes in Industrial International and Climate & Industrial Controls segments.
- 2Net income attributable to common shareholders decreased to $256.6 million ($1.68 diluted EPS) for the quarter and $677.3 million ($4.46 diluted EPS) for the nine months, down from $312.1 million ($2.01 diluted EPS) and $849.9 million ($5.49 diluted EPS) respectively in the prior year.
- 3Acquisitions contributed significantly, adding $134 million in sales for the quarter and $343 million for the nine months, helping to mitigate the decline in organic sales.
- 4Gross profit margin declined to 22.3% for the quarter and 22.1% for the nine months, compared to 23.7% and 24.1% respectively in the prior year, attributed to higher benefit costs and operating inefficiencies.
- 5The company completed eight acquisitions in the first nine months of fiscal 2013, with an aggregate purchase price of approximately $621 million in cash and $114 million in assumed debt.
- 6Divestitures of automotive businesses and the Turkey refrigeration components business occurred during the period, impacting the Climate & Industrial Controls segment.
- 7Cash and cash equivalents increased significantly to $1.68 billion from $838.3 million at the end of the prior fiscal year, largely due to increased borrowings.