Parker-Hannifin Q4 Results Surpass Street Expectation, Provides FY24 Outlook

Parker-Hannifin Corp PH reported fourth-quarter FY23 sales growth of 22% year-over-year to $5.09 billion and +6% on an organic basis, beating the consensus of $5.01 billion.

Adjusted EPS improved to $6.08 from $5.16 in 4Q22, beating the consensus of $5.50.

Segment Sales: Diversified Industrial North America $2.3 billion (+10.2% Y/Y), Diversified Industrial International $1.51 billion (+6.2% Y/Y), and Aerospace Systems $1.28 billion (+89.7% Y/Y).

Total segment operating margin for the quarter expanded to 22.1% from 20.9% in 4Q22 and, on an adjusted basis, expanded to 24% from 22.9%.

EBITDA margin expanded to 24.9% from 7.9% last year, and the Adjusted margin expanded 130 bps to 24.4%.

Parker Hannifin’s operating cash flow for FY23 totaled $2.98 billion, compared to $2.44 billion in FY22. 

It held cash and equivalents of $475.18 million as of June 30, 2023. The company reduced debt by $846 million in the quarter.

Orders increased 3% Y/Y, with an 8% decrease in Diversified Industrial North America businesses and a 1% decline in Diversified Industrial International businesses. 

Orders increased by 28% Y/Y in the Aerospace Systems Segment on a rolling 12-month average basis.

FY24 Guidance: Parker-Hannifin expects organic sales growth of 3%-6% and Adjusted Total segment operating margin of 23.0%-23.4%.

PH sees Adjusted EPS of $21.90-$22.90 versus the $22.26 consensus.

Price Action: PH shares are trading higher by 2.73% at $416.95 on the last check Thursday.