CLEVELAND (Jan. 20, 2012)—Parker Hannifin Corporation, a motion and control technologies company, reported results for the fiscal 2012 second quarter ended Dec. 31, 2011. Fiscal 2012 second quarter sales were $3.1 billion, a second quarter record and an increase of 8.4 percent from $2.9 billion in the prior year quarter. Net income was also a second quarter record at $242.3 million, an increase of 4.5 percent compared with $231.8 million in the second quarter of fiscal 2011. Fiscal 2012 second quarter earnings per diluted share were a second quarter record at $1.56, an increase of 12.2 percent compared with $1.39 in the prior year quarter. Cash flow from operations for the first six months of fiscal 2012 was $563.4 million, or 8.9 percent of sales, compared with $408.2 million, or 7.2 percent of sales, for the first six months of fiscal 2011.
“We are pleased to deliver strong organic growth and second quarter record sales, net income and earnings,” said Chairman, CEO and President, Don Washkewicz. “We generated 8 percent sales growth in the quarter, substantially all of which was organic, led by double-digit revenue growth in our Industrial North America business segment. Internationally, we are seeing some softening in business conditions consistent with global macro-economic indicators, which moderated our year over year revenue growth and affected segment operating margin performance. However, strong operating margin performance in the Industrial North America segment contributed to an overall increase in total segment operating margins, which reached 14.2 percent for the quarter and exceeded 15 percent year to date.”
Segment Results
In the Industrial North America segment, second quarter sales increased 13.2 percent to $1.2 billion, and operating income was $195.7 million compared with $159.4 million in the same period a year ago.
In the Industrial International segment, second quarter sales increased 6.2 percent to $1.2 billion, and operating income was $165.9 million compared with $167.8 million in the same period a year ago.
In the Aerospace segment, second quarter sales increased 8.0 percent to $496.5 million, and operating income was $70.3 million compared with $63.6 million in the same period a year ago.
In the Climate and Industrial Controls segment, second quarter sales declined 2.9 percent to $208.2 million, and operating income was $9.8 million compared with $9.5 million in the same period a year ago.
Orders
Parker reported an increase of 3 percent in orders for the quarter ending December 31, 2011, compared with the same quarter a year ago. The company reported the following orders by operating segment:
- Orders increased 8 percent in the Industrial North America segment, compared with the same quarter a year ago.
- Orders increased 1 percent in the Industrial International segment, compared with the same quarter a year ago.
- Orders remained unchanged in the Aerospace segment on a rolling 12-month average basis.
- Orders declined 5 percent in the Climate and Industrial Controls segment, compared with the same quarter a year ago.
Outlook
For fiscal 2012, the company has adjusted its guidance for earnings from continuing operations to the range of $6.90 to $7.30 per diluted share.
Washkewicz added, “We have made an adjustment in our earnings range to reflect business conditions internationally, while continued strength in North America will allow Parker to deliver an all-time record fiscal year in diluted earnings per share.”
With annual sales exceeding $12 billion in fiscal year 2011, Parker Hannifin is the world's leading diversified manufacturer of motion and control technologies and systems, providing precision-engineered solutions for a wide variety of mobile, industrial and aerospace markets. The company employs approximately 58,000 people in 47 countries around the world. Parker has increased its annual dividends paid to shareholders for 55 consecutive fiscal years, among the top five longest-running dividend-increase records in the S&P 500 index. For more information, visit the company's web site at www.parker.com, or its investor information web site at www.phstock.com.
Notes on Orders
Orders provide near-term perspective on the company's outlook, particularly when viewed in the context of prior and future quarterly order rates. However, orders are not in themselves an indication of future performance. All comparisons are at constant currency exchange rates, with the prior year restated to the current-year rates. All exclude acquisitions until they can be reflected in both the numerator and denominator. Aerospace comparisons are rolling 12-month average computations. The total Parker orders number is derived from a weighted average of the year-over-year quarterly percent change in orders for the Industrial North America, Industrial International, and Climate and Industrial Controls segments, and the year-over-year 12-month rolling average of orders for the Aerospace segment.