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Parker-Hannifin Reports Record Sales and EPS

Parker Hannifin Corporation has reported its fiscal 2024 third quarter results, showcasing significant improvements in various key metrics compared to the prior year.

The company achieved record sales of $5.07 billion, marking a slight increase from the $5.06 billion reported in the third quarter of fiscal 2023. Notably, organic sales saw a 1% increase. Moreover, the segment operating margin reached a record 21.5%, with an even more impressive 24.7% on an adjusted basis, reflecting a substantial increase of 150 basis points from the prior year.

Earnings per share (EPS) also demonstrated strong growth, reaching $5.56, a noticeable increase from the $4.54 reported in the previous year's quarter. Adjusted EPS saw an even more substantial rise, reaching a record $6.51, marking a 10% increase from the $5.93 reported in the third quarter of fiscal 2023.

The company's year-to-date cash flow from operations experienced a significant surge, increasing by 20% to reach a record $2.1 billion, which represents 14.6% of sales. This is compared to $1.8 billion, or 12.8% of sales, in the prior year.

Across its segments, Parker Hannifin Corporation saw varying results. The Diversified Industrial segment reported a 5% decrease in North American sales, while international sales within this segment decreased by 6%. However, the segment managed to achieve an adjusted operating income of 24.1% of sales, reflecting a 120 basis point increase from the prior year. The Aerospace Systems segment, on the other hand, showed robust performance, with a substantial 18% increase in sales and an operating income of 26.7% of sales, marking a 320 basis point increase from the prior year.

Looking ahead, the company has raised its outlook for the fiscal year ending June 30, 2024. It now expects total sales growth of approximately 4%, with a total segment operating margin of approximately 21.2%, or 24.6% on an adjusted basis. Additionally, the earnings per share range is anticipated to be $20.80 to $21.00, or $24.65 to $24.85 on an adjusted basis.

Parker Hannifin Corporation's Chairman and CEO, Jenny Parmentier, expressed confidence in the company's ability to continue delivering strong performance and creating shareholder value, highlighting the upcoming investor meeting on May 16, 2024.

The market has reacted to these announcements by moving the company's shares -3.9% to a price of $521.6. For the full picture, make sure to review Parker-Hannifin's 8-K report.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.

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