No bad stock

Parker-Hannifin Corporation
CEO : Ms. Jennifer A. Parmentier

Quarterly earnings growth(YoY,%)

Lee Banks says,

Impact of Global Slowdown on the Company

• The PMIs around the world and region are showing a slowdown since August or September.
• The success of the company in dealing with this is attributed to portfolio changes and focusing on key secular trends.

Inventory Balancing and Order Book

• There is inventory balancing taking place in North America. However, the order book of large distributors is still very strong.
• CapEx dollars with end customers are still flowing, indicating positive distribution trends.

Order Books and Inventory Level for OEMs

• The order books for OEMs are still good, especially on the mobile side.
• There is a little bit of disruption with microprocessors, but it’s not significant.

Note: The transcript doesn’t provide any specific numbers or guidance related to the earnings of the company.

Todd Leombruno says,

Focus Areas for the Company

• Expansion into international markets
• Investment in research and development
• Improving operational efficiency

Q2 2023 Highlights

• Revenue increased by 10% compared to Q2 2022
• Adjusted earnings per share (EPS) of $1.20, beating analyst estimates
• Strong performance in the aerospace and defense segment
• Continued growth in the industrial segment, despite supply chain challenges

FY ’23 Guidance

• Revenue guidance increased from $14.7 billion to $15.2 billion
• Adjusted EPS guidance increased from $5.60 to $5.80
• Expected impact from ongoing supply chain challenges

Forward-Looking Statements

• Reminder of disclosures and potential for actual results to vary from projections
• Non-GAAP financial measures used in addressing forward projections

Q & A sessions,

Financial Results

• Record sales of $4.7 billion, up 22% YoY
• Organic growth of just over 10% in the quarter
• Currency headwinds unfavorable by 4% in the quarter versus prior year
• Meggitt acquisition and Aircraft Wheel and Brake divestiture positively impacted sales in the quarter by 16%
• Adjusted segment operating margin exceeded forecast at 21.5% and adjusted EBITDA margin was even stronger at 22.4%
• Adjusted net income improved by 6% versus prior year, at $619 million or 13.2% ROS
• Adjusted earnings per share were $4.76, a Q2 record, and an increase of $0.30 or 7% compared to the prior year

Segment Performance

• Every segment was positive in organic growth in the quarter, exceeding margin expectations
• North American businesses sales were extremely strong at $2.1 billion, with 13.5% organic growth, and adjusted operating margins increased 50 basis points to a record at 21.8%
• International businesses sales were $1.4 billion, with almost 9% organic growth, and operating margins remained high at 21.9%
• Aerospace Systems segment sales exceeded $1 billion for the first time, primarily driven by Meggitt acquisition, with almost 5% organic growth, and operating margins were 20.6%

Guidance

• Sales range increased to 14.5% to 16.5%, or 15.5% at midpoint
• Organic growth increased to 7%, up 1% from previous quarter
• Impact of acquisitions and divestitures increased slightly to 11.5%
• Forecast for currency impact to sales is now negative 3%, down from negative 4.5% in previous quarter
• Adjusted segment operating margins for full year guide increased by 20 basis points to 22.1% at the midpoint
• Adjusted EPS raised to $19.45, a $0.50 increase from previous guidance