$PH earnings report

Parker reported record FY27 first-quarter sales of $ 5,992, up 17.9 %, with 11.5 % organic sales growth and acquisitions contributing 6.9 % to total reported sales growth. Management cited increased demand across all market verticals, while rolling 12-month order rates were double digit in every business and backlog reached a record $13.7 billion. The company completed the Filtration Group Corporation acquisition during the quarter.

Profitability improved on an adjusted basis. Total segment operating margin was 24.4%, compared with 24.2%, while adjusted segment operating margin was 28.6%, compared with 27.4%. Adjusted net income was $ 1,138 and adjusted diluted EPS was $ 8.90, compared with $ 927 and $ 7.22. GAAP net income was $ 884 and diluted EPS was $ 6.92, compared with $ 808 and $ 6.29. GAAP results included amortization of acquired intangibles, business realignment charges, integration costs to achieve, acquisition-related expenses and tariff refunds, net.

Diversified Industrial North America produced sales of $ 2,445 and reported organic growth of 9.4 %, but its GAAP segment operating margin was 23.0% versus 24.8%; the release attributes the margin to expenses related to the Filtration Group acquisition. International sales were $ 1,707, up 22.0 %, with APAC organic growth of 23.4 %. Aerospace Systems sales were $ 1,867, up 13.8 %, with organic growth of 13.9 % and adjusted segment operating margin of 30.7%.

Cash flow from operations was 752, compared with 782, while capital expenditures were (109). The company spent (9,102) on acquisitions, net of cash acquired, and financing activity included 12,478 of proceeds from borrowings and (5,257) of payments for borrowings. Cash and cash equivalents were $ 711 at September 30, 2026, while notes payable and current portion of long-term debt were $ 4,744 and long-term debt was 12,734.

For FY27, Parker raised outlook and now expects reported sales growth of 16.0% to 19.0%, organic sales growth of 7.5% to 10.5%, adjusted segment operating margin of 27.7% to 28.1%, adjusted EPS of $36.45 to $37.25 and free cash flow of $3,500 to $4,000. The outlook includes Filtration Group Corporation. No previous outlook figures were supplied, so the magnitude of the increase cannot be assessed from the documents.

Parker reported record sales in both the fiscal 2026 fourth quarter and full year. Fourth-quarter sales increased 9.8% to $5.8 billion, with organic sales growth of 8.0%. Full-year sales increased 8.3% to $21.5 billion, while organic sales growth was 6.6%. The growth profile extended across the operating portfolio, including 4.9% fourth-quarter organic growth in Diversified Industrial North America, 6.5% in Diversified Industrial International and 13.3% in Aerospace Systems.

Profitability strengthened materially. Fourth-quarter segment operating margin was 26.5%, up 260 bps, and adjusted segment operating margin was 28.0%, up 110 bps. For the full year, segment operating margin was 24.5%, up 150 bps, while adjusted segment operating margin was 27.3%, up 120 bps. Fourth-quarter adjusted EPS increased 21% to $9.27, and full-year adjusted EPS increased 18% to $32.31. The company notes that current-period adjusted results exclude a reduction of cost of sales related to tariff refunds, which it describes as discrete, non-operating and not expected to recur.

Segment commentary points to a broad industrial recovery and continued aerospace strength. North America sales improved across all market verticals, International sales were led by 16% organic growth in Asia, and Aerospace delivered double-digit growth across all market segments. Aerospace backlog reached $8.5B and total backlog rose to $12.8 billion. Fourth-quarter order rates were +16% in North American Diversified Industrial, +24% in International Diversified Industrial and +18% in Aerospace. Beginning in fiscal 2027, Parker will place all order-rate comparisons on a rolling 12-month average basis.

Cash generation and shareholder distributions were notable. Full-year cash flow from operations was a record $4.4 billion, or 20.3% of sales. Parker returned nearly $2 billion through share repurchases and dividends, and increased the annual dividend 11%. Portfolio activity included completion of the Curtis Instruments acquisition and announced agreements to acquire Filtration Group Corporation and CIRCOR's Commercial and Defense Aerospace Business.

For fiscal 2027, Parker guides to reported sales growth and organic sales growth of 5.5% to 8.5%, with 0.5% from previously completed acquisitions and unfavorable currency of 0.5%. It expects segment operating margin of 24.5% to 24.9%, adjusted segment operating margin of 27.5% to 27.9%, EPS of $30.00 to $31.00 and adjusted EPS of $34.25 to $35.25. The outlook excludes the pending Filtration Group and CIRCOR acquisitions. Management also raised its adjusted segment operating margin target by 300 basis points to 30% by fiscal 2031 after stating it surpassed its previous target of 27% this year.