Parker Reports Fiscal 2023: Productive Second Quarter Results

March 8, 2023

Fiscal 2023 Second Quarter Highlights

• Record sales, record adjusted net income and record adjusted EPS
• Sales increased 22% to $4.67 billion; organic sales increased 10%
• Total segment operating margin was 15.3%, or 21.5% adjusted
• Net income was $395.2 million, or $618.9 million adjusted
• EBITDA margin was 19.1%, or 22.4% adjusted
• EPS were $3.04, or $4.76 adjusted
• Company increases full year organic growth and adjusted EPS guidance
• Fiscal 2023 Q2 Financial Tables

Parker Hannifin Corporation reported results for the fiscal 2023 second quarter ended December 31, 2022. Fiscal 2023 second quarter sales were a record at $4.67 billion, an increase of 22%, compared with $3.82 billion in the second quarter of fiscal 2022. Net income was $395.2 million compared with $387.6 million in the prior year quarter. Adjusted net income was $618.9 million, an increase of 6% compared with $582.2 million in the second quarter of fiscal 2022. Earnings per share were $3.04 compared with $2.97 in the second quarter of fiscal 2022.

Adjusted earnings per share increased 7% to a record of $4.76 compared with $4.46 in the prior year quarter. Fiscal 2023 year-to-date cash flow from operations was $1.08 billion, or 12.1% of sales, compared with $1.01 billion, or 13.3% of sales, in the prior year. A reconciliation of non-GAAP measures is included in the financial tables of this press release and includes various expenses associated with the completion of the acquisition of Meggitt plc and the related divestiture of the Aircraft Wheel and Brake Division during fiscal 2023. 

“This was another quarter that highlights the consistency with which Parker is able to achieve record levels of performance,” said Chief Executive Officer, Jenny Parmentier. “Our results include the first full quarter of the Meggitt acquisition, which performed very well as our integration teams continue to make great progress. Overall organic sales growth was impressive, with increased organic sales in every segment. Our strong sales and segment margin performance contributed to record adjusted earnings per share for the quarter. Our team continues to drive excellent performance.” 

Segment Results 

Diversified Industrial Segment:  North American second quarter sales increased 18% to $2.14 billion and operating income was $419.9 million compared with $337.4 million in the same period a year ago. On an adjusted basis, North American operating income was $466.9 million, or 21.8% of sales, a 50 basis point increase compared with the prior year quarter. International second quarter sales were flat at $1.40 billion and operating income was $285.5 million compared with $291.6 million in the same period a year ago. On an adjusted basis, International operating income was $305.8 million, or 21.9% of sales. 

Aerospace Systems Segment:  Second quarter sales increased 84% to $1.14 billion and operating income was $8.8 million compared with $114.8 million in the same period a year ago. On an adjusted basis, operating income was $234.6 million, or 20.6% of sales. 

Parker reported the following orders for the quarter ending December 31, 2022, compared with the same quarter a year ago: 

• Orders increased 3% for total Parker
• Orders increased 2% in the Diversified Industrial North America businesses
• Orders decreased 4% in the Diversified Industrial International businesses
• Orders increased 22% in the Aerospace Systems Segment on a rolling 12-month average basis.

Outlook

Parker’s outlook for the fiscal year ending June 30, 2023 has been updated. The company expects fiscal 2023 organic sales growth to be in the range of 6% to 8% and earnings per share in the range of $13.50 to $14.00, or $19.20 to $19.70 on an adjusted basis. A reconciliation of forecasted earnings per share to adjusted forecasted earnings per share is included in the financial tables of this press release. 

Parmentier added, “We expect another year of record performance in fiscal 2023. Longer term, we feel very positive about our plans to deliver $300 million of synergies from the acquisition of Meggitt and remain committed to our fiscal year 2027 financial targets. We have a bright future ahead driven by our business system The Win Strategy™, a transformed portfolio and secular growth trends.” 

NOTICE OF CONFERENCE CALL: Parker Hannifin’s conference call and slide presentation to discuss its fiscal 2023 second quarter results are available to all interested parties via live webcast today at 11:00 a.m. ET, at www.phstock.com. A replay of the webcast will be available on the site approximately one hour after the completion of the call and will remain available for one year. To register for e-mail notification of future events, please visit www.phstock.com.

Another Mechatronics Canada Article on Parker, “Parker Elects Jennifer A. Parmentier as Chief Executive Officer and Andrew D. Ross as Chief Operating Officer, Effective January 1, 2023” here

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