Parker Reports Fiscal 2024 Fourth Quarter and Full Year Results and Issues Guidance for Fiscal 2025

Strong Fourth Quarter Caps Record Year; Guidance and FY29 Targets Point to Bright Future

CLEVELAND, Aug. 08, 2024 (GLOBE NEWSWIRE) -- Parker Hannifin Corporation (NYSE: PH), the global leader in motion and control technologies, today reported results for the quarter and year ended June 30, 2024, that included the following highlights (compared with the prior year period):

Fiscal 2024 Fourth Quarter Highlights:

• Sales increased 2% to a record $5.2 billion; Organic sales growth was 3%
• Net income was $785 million, or $884 million adjusted
• EPS were $6.01, an increase of 10%, or a record $6.77 adjusted, an increase of 11%
• EBITDA margin was 25.8%, an increase of 90 bps, or 26.3% adjusted, an increase of 190 bps
• Segment operating margin was 22.2%, an increase of 10 bps, or a record 25.3% adjusted, an increase of 130 bps

Fiscal 2024 Full Year Highlights:

• Sales increased 5% to a record $19.9 billion; Organic sales growth was 2%
• Net income was $2.8 billion, or $3.3 billion adjusted
• EPS were $21.84, an increase of 36%, or a record $25.44 adjusted, an increase of 18%
• EBITDA margin was 25.2%, an increase of 380 bps, or 25.6% adjusted, an increase of 200 bps
• Segment operating margin was 21.5%, an increase of 240 bps, or a record 24.9% adjusted, an increase of 200 bps
• Cash flow from operations increased 14% to $3.4 billion, or 17.0% of sales

“We delivered an exceptionally strong fourth quarter capping another year of record performance,” said Chairman and Chief Executive Officer, Jenny Parmentier. “Our ability to drive outstanding results reflects the dedication and commitment of our people, the strength and balance of our portfolio, and the power of our business system, The Win Strategy™.

“For the year, we delivered on our commitments with respect to safety and financial targets. We had record sales approaching $20 billion, record adjusted segment operating margin, which increased 200 basis points compared to the prior year, adjusted earnings per share growth of 18%, and record free cash flow of $3 billion. Parker has a very bright future ahead as indicated by our strong outlook for fiscal year 2025, which puts us on track to achieve our financial targets for fiscal year 2029.”

This news release contains non-GAAP financial measures. Reconciliations of adjusted numbers and certain non-GAAP financial measures are included in the financial tables of this press release.

Outlook

Parker issued guidance for the fiscal year ending June 30, 2025. The company expects:

• Total sales growth in fiscal 2025 of 1.5% - 4.5%, with organic sales growth of 2% to 5%
• Total segment operating margin of 22.1% to 22.5%, or 25.2% to 25.6% on an adjusted basis
• EPS of $22.65 to $23.35, or $26.30 to $27.00 on an adjusted basis

Segment Results

Diversified Industrial Segment

• Achieved record segment operating margin on lower sales
• Softness continues in transportation and off-highway markets

• Achieved record segment operating margin on lower sales
• Market softness continues in Europe
• Asia sales declined at a decreasing rate

Aerospace Systems Segment

• Quarterly sales surpassed $1.5 billion for the first time
• Broad based strength across all commercial and defense markets
• Aftermarket strength drove record adjusted segment operating margin

Order Rates

• Company order rates improved sequentially
• Aerospace orders remained strong against a tough prior year comparison

About Parker Hannifin
Parker Hannifin is a Fortune 250 global leader in motion and control technologies. For more than a century the company has been enabling engineering breakthroughs that lead to a better tomorrow. Learn more at www.parker.com or @parkerhannifin.

Notice of Webcast
Parker Hannifin's conference call and slide presentation to discuss its fiscal 2024 fourth quarter and full year results are available to all interested parties via live webcast today at 11:00 a.m. ET, at investors.parker.com. A replay of the webcast will be available on the site approximately one hour after the completion of the call and will remain available for one year. To register for e-mail notification of future events please visit investors.parker.com.

Note on Orders The company reported orders for the quarter ending June 30, 2024, compared with the same quarter a year ago. All comparisons are at constant currency exchange rates, with the prior year quarter restated to the current-year rates. Diversified Industrial comparisons are on 3-month average computations and Aerospace Systems comparisons are on rolling 12-month average computations.

Note on Non-GAAP Financial Measures
This press release contains references to non-GAAP financial information including (a) adjusted net income; (b) adjusted earnings per share; (c) adjusted operating margin and segment operating margins; (d) adjusted operating income and segment operating income; (e) EBITDA margin; (f) adjusted EBITDA margin; (g) organic sales growth and (h) free cash flow. The adjusted net income, adjusted earnings per share, adjusted operating margin, adjusted segment operating margin, adjusted operating income, adjusted segment operating income and organic sales measures are presented to allow investors and the company to meaningfully evaluate changes in net income, earnings per share and segment operating margins on a comparable basis from period to period. This press release also contains references to EBITDA margin, adjusted EBITDA margin and free cash flow. EBITDA is defined as earnings before interest, taxes, depreciation and amortization. Free cash flow is defined as cash flow from operations less capital expenditures. Although adjusted net income, adjusted earnings per share, adjusted operating margin and segment operating margins, adjusted operating income and segment operating income, EBITDA margin, adjusted EBITDA margin, organic sales growth and free cash flow are not measures of performance calculated in accordance with GAAP, we believe that they are useful to an investor in evaluating the results of this quarter and fiscal year versus the prior periods. Comparable descriptions of record adjusted results in this release refer only to the period from the first quarter of FY2011 to the periods presented in this release. This period coincides with recast historical financial results provided in association with our FY2014 change in segment reporting. A reconciliation of non-GAAP measures is included in the financial tables of this press release.

Forward-Looking Statements
Forward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. Often but not always, these statements may be identified from the use of forward-looking terminology such as “anticipates,” “believes,” “may,” “should,” “could,” “expects,” “targets,” “is likely,” “will,” or the negative of these terms and similar expressions, and may also include statements regarding future performance, orders, earnings projections, events or developments. Parker cautions readers not to place undue reliance on these statements. It is possible that the future performance may differ materially from expectations, including those based on past performance.

Among other factors that may affect future performance are: changes in business relationships with and orders by or from major customers, suppliers or distributors, including delays or cancellations in shipments; disputes regarding contract terms, changes in contract costs and revenue estimates for new development programs; changes in product mix; ability to identify acceptable strategic acquisition targets; uncertainties surrounding timing, successful completion or integration of acquisitions and similar transactions; ability to successfully divest businesses planned for divestiture and realize the anticipated benefits of such divestitures; the determination and ability to successfully undertake business realignment activities and the expected costs, including cost savings, thereof; ability to implement successfully business and operating initiatives, including the timing, price and execution of share repurchases and other capital initiatives; availability, cost increases of or other limitations on our access to raw materials, component products and/or commodities if associated costs cannot be recovered in product pricing; ability to manage costs related to insurance and employee retirement and health care benefits; legal and regulatory developments and other government actions, including related to environmental protection, and associated compliance costs; supply chain and labor disruptions, including as a result of labor shortages; threats associated with international conflicts and cybersecurity risks and risks associated with protecting our intellectual property; uncertainties surrounding the ultimate resolution of outstanding legal proceedings, including the outcome of any appeals; effects on market conditions, including sales and pricing, resulting from global reactions to U.S. trade policies; manufacturing activity, air travel trends, currency exchange rates, difficulties entering new markets and economic conditions such as inflation, deflation, interest rates and credit availability; inability to obtain, or meet conditions imposed for, required governmental and regulatory approvals; changes in the tax laws in the United States and foreign jurisdictions and judicial or regulatory interpretations thereof; and large scale disasters, such as floods, earthquakes, hurricanes, industrial accidents and pandemics. Readers should also consider forward-looking statements in light of risk factors discussed in Parker’s Annual Report on Form 10-K for the fiscal year ended June 30, 2023 and other periodic filings made with the SEC.

Released August 8, 2024