In This Article:
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Revenue: Sales down 1.6% versus prior year, impacted by divestitures (1.4% unfavorable) and currency (0.9% unfavorable).
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Organic Growth: Positive at almost 1% for the quarter.
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Adjusted Segment Operating Margin: Record 25.6%, an increase of 110 basis points versus prior year.
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Adjusted EBITDA Margin: Record 26.8%, also an increase of 110 basis points from prior year.
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Adjusted Net Income: $853 million, or 18% return on sales.
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Adjusted Earnings Per Share (EPS): Up 6% to a Q2 record of $6.53.
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Debt Reduction: Reduced by $1.1 billion in the quarter, $1.5 billion year-to-date.
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Cash Flow from Operations: Record year-to-date cash flow from operations at 17.4% of sales, totaling $1.7 billion.
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Free Cash Flow: Increased 17% from prior year, totaling $1.5 billion or 15.2% of sales.
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Aerospace Sales: Record $1.5 billion, up 14% year-over-year, with 14% organic growth.
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Industrial North America Sales: $1.9 billion, with organic growth of negative 5%.
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Industrial International Sales: $1.3 billion, with organic growth of negative 3%.
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Order Rates: Increased 5% for the quarter, with Aerospace orders up 9%.
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Guidance: Full-year organic growth forecast at approximately 2%, with adjusted EPS midpoint at $26.70.
Release Date: January 30, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Parker Hannifin Corp (NYSE:PH) achieved a record second-quarter adjusted segment operating margin of 25.6%, driven by the consistent execution of the Win Strategy.
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The company reported record earnings per share and year-to-date cash flow from operations, which allowed for a substantial debt reduction of $1.1 billion.
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Aerospace orders showed continued strength, with a 14% increase in sales driven by a 20% growth in the aftermarket sector.
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The company raised its Aerospace and Defense sales forecast to 11% for FY25, reflecting strong aftermarket performance and gradual OEM rate increases.
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Parker Hannifin Corp (NYSE:PH) demonstrated strong margin expansion across all business segments, with a Q2 record adjusted EBITDA margin of 26.8%.
Negative Points
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Overall sales were down 1.6% compared to the previous year, primarily due to divestitures and unfavorable currency impacts.
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The industrial sector faced continued pressure, with North America experiencing a negative 5% organic growth and international markets seeing a negative 3% growth.
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The expected industrial recovery has been delayed, with ongoing challenges in transportation and off-highway markets.
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Currency headwinds are expected to be a 1% negative impact for the full year, adding to the challenges faced by the company.
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The off-highway sector is projected to decline in the mid-teens due to OEM destocking and production cuts, with continued weakness in the agricultural market.