Summary
Parker-Hannifin Corporation (PH) reported a significant increase in net sales for the third quarter and the first nine months of fiscal year 2018, driven primarily by strong performance in its Diversified Industrial segment, both in North America and internationally. This growth was bolstered by a combination of organic demand across various end markets and contributions from recent acquisitions. The company also saw an improvement in gross profit margin, largely due to higher margins in the Aerospace Systems segment, partially offset by pressures in the Diversified Industrial segment. Profitability showed a substantial improvement, with net income attributable to common shareholders rising considerably in the third quarter compared to the prior year. Diluted earnings per share also saw a strong increase. These positive results reflect the company's ongoing strategic initiatives, including cost management and the integration of acquisitions. Investors should note the ongoing impact of the Tax Cuts and Jobs Act, which affected the effective tax rate, and the company's continued focus on operational efficiency and strategic growth opportunities.
Financial Highlights
55 data points| Revenue | $3.75B |
| Cost of Revenue | $2.82B |
| Gross Profit | $929.79M |
| SG&A Expenses | $416.46M |
| Operating Income | $538.46M |
| Interest Expense | $54.15M |
| Net Income | $366.13M |
| EPS (Basic) | $2.75 |
| EPS (Diluted) | $2.70 |
| Shares Outstanding (Basic) | 133.03M |
| Shares Outstanding (Diluted) | 135.77M |
Key Highlights
- 1Net sales increased by 20.2% to $3,749.6 million for the three months ended March 31, 2018, and by 22.9% to $10,484.9 million for the nine months ended March 31, 2018, compared to the prior-year periods.
- 2Net income attributable to common shareholders increased significantly by 53.4% to $366.0 million for the three months ended March 31, 2018, compared to the prior year.
- 3Diluted earnings per share rose to $2.70 for the three months ended March 31, 2018, from $1.75 in the prior-year period.
- 4Gross profit margin improved to 24.7% for the quarter and 24.4% for the nine months, up from 23.6% and 23.4% respectively, in the prior year.
- 5The Diversified Industrial segment, particularly North America and International operations, was the primary driver of sales growth.
- 6The company's effective tax rate decreased due to the U.S. Tax Cuts and Jobs Act, although one-time adjustments related to the act increased the nine-month effective tax rate.
- 7Cash provided by operating activities increased to $904.8 million for the nine months ended March 31, 2018, up from $789.3 million in the prior year.