Parker-Hannifin Stock Jumps 11% as Strong Aerospace Sales Boost Earnings

Key Takeaways

• Parker-Hannifin shares were among the top gainers on the S&P 500 after the electronic equipment maker reported strong quarterly results.
• Demand in aerospace services helped the company beat sales and profit estimates, despite softness in diversified industrials.
• The earnings report wrapped up Parker-Hannifin’s fiscal 2024, and the firm forecasts sustained organic sales growth in the year ahead.

Shares of electronic equipment manufacturer Parker-Hannifin (PH) soared 11% Thursday after the electronic equipment manufacturer reported strong quarterly results.

Strong demand in its aerospace services segment helped Parker-Hannifin top sales and profit estimates for its fiscal fourth quarter of 2024, despite economic headwinds facing its diversified industrial business.

For the three months ended June 30, 2024, the manufacturer of motion control technologies posted adjusted earnings per share (EPS) of $6.77 on revenue of $5.19 billion. Both figures exceeded analysts’ forecasts, which called for EPS of $6.23 and $5.08 billion in revenue, according to consensus estimates compiled by Visible Alpha.

Aerospace Services Demand Drives Sales Growth

Parker-Hannifin reports its results in two segments—aerospace services and diversified industrials— and it was the former that played a pivotal role in its upbeat quarter. The aerospace services segment posted year-over-year organic sales growth of 19.1%, topping $1.5 billion in quarterly revenue for the first time.

The company noted positive trends across commercial and defense aviation markets. It also highlighted strength in its aftermarket services, which helped the aerospace services segment achieve its best-ever adjusted operating margin.

Diversified Industrials Segment Faces Headwinds

Sales growth was harder to come by for Parker-Hannifin’s diversified industrials business. In fact, the segment saw organic sales decline from the previous year, slipping 2.8% in North America and 2.5% internationally.

Softness in European markets, as well as transportation and off-highway markets in North America, pressured diversified industrials results. However, Parker-Hannifin pointed to a record operating margin for the segment despite the slower sales.

Outlook and Stock Performance

Looking into fiscal 2025, the company expects sustained aerospace demand to drive overall organic sales growth of 2% to 5% over the full year, compared with 2.3% in fiscal 2024.

Parker-Hannifin shares rose 10.8% to $568.08, making it one of the top gainers on the S&P 500 on Thursday. The stock is now up 24% year-to-date.

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