Parker Hannifin Corporation (PH) reported earnings per share from continuing operations of $1.39 for the second quarter of 2011, exceeding the Zacks Consensus Estimate of $1.30. Revenues for the quarter were $2.9 billion, up 21.7% year over year, ahead of the Zacks Consensus Estimate of $2.73 billion.
In the Industrial North America, segment sales in the most recent quarter, increased 23.4% year over year to $1.0 billion with operating income of $159.4 million, up 39.3%.
In the Industrial International, segment revenues were up 23.1% to $1.1 billion with operating income of $167.8 million, up 103%.
Aerospace segment revenues increased 14.7% to $459.6 million, and operating income was $63.6 million, up 55%.
Climate and Industrial Controls segment sales increased 22.6% year over year to $214.3 million, while operating income was $9.5 million, up 55.7%.
Net sales by the four segments as a percentage of total sales in the quarter were 36.4%, 40%, 16% and 7.6% respectively.
Total order intake showed a robust growth of 29% in the most recent quarter. Division wise orders increased by 26% in the Industrial North America segment, 29% in the Industrial International segment, 37% in the Aerospace segment and 26% in the Climate and Industrial Controls segment.
Cash and Cash Equivalents were $808.7 million with long-term debt of $1.7 billion and shareowners' equity of $5.1 billion.
For the year 2011, the company has increased guidance for earnings from continuing operations to the range of $5.80 to $6.20 per share.
Parker Hannifin is a high-quality company that is showing good execution through its cost-saving efforts. Although PH stands to benefit from a recovery in global manufacturing activity, the company's increased scale in its international business (where Europe represents by far the largest region) as well as its meaningful aerospace presence increases its late-cycle exposure relative to past economic cycles.
The company's domestic and foreign operations are subject to significant competitive pressures. To compete successfully, the company's Industrial Segment and Climate & Industrial Controls Segment must excel in terms of product quality and innovation, customer service, manufacturing and distribution capability and price competitiveness.
Meanwhile, the Aerospace Segment must excel on the basis of technological and engineering capability, quality, delivery and service, and price competitiveness. Major competitors of Parker are Eaton Corporation (ETN) and Honeywell International Inc. (HON).
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.
We continue to maintain a Neutral rating on Parker-Hannifin for the long term. The company has a Zacks #2 Rank (Buy recommendation) over the next one-to-three months.
EATON CORP (ETN): Free Stock Analysis Report
HONEYWELL INTL (HON): Free Stock Analysis Report
PARKER HANNIFIN (PH): Free Stock Analysis Report
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