Parker-Hannifin reported record sales and adjusted earnings for its fiscal 2027 first quarter, with growth coming from both stronger underlying demand and acquisitions. The company also completed its acquisition of Filtration Group and raised its full-year outlook for organic sales growth, adjusted margins, adjusted earnings per share and free cash flow.
Management cited increased demand across all market areas and record backlog levels. The updated annual outlook now includes Filtration Group.
First-quarter results
- Sales rose 18% to a record $6.0 billion from the year-earlier quarter. Organic sales grew 11.5%, while acquisitions added 7%.
- Net income increased 9% to $900 million. On an adjusted basis, net income rose 23% to $1.1 billion.
- Earnings per share climbed 10% to $6.92. Adjusted earnings per share rose 23% to a record $8.90.
- Segment operating margin was 24.4%, up 20 basis points. Adjusted segment operating margin reached a record 28.6%, an increase of 120 basis points.
Fiscal 2027 outlook
Parker raised its outlook for the year ending June 30, 2027. The updated forecast includes Filtration Group:
- Reported sales growth of 16% to 19%.
- Organic sales growth of 7.5% to 10.5%, with acquisitions expected to add 9% and currency to reduce growth by 0.5%.
- Segment operating margin of 23.6% to 24.0%, or 27.7% to 28.1% on an adjusted basis.
- Earnings per share of $29.65 to $30.45, or $36.45 to $37.25 on an adjusted basis.
The company also raised its full-year free-cash-flow outlook, but did not provide a target range in the reported figures.
North America businesses
- Sales increased 19.6% to $2.445 billion, with organic growth of 9.4%.
- Reported segment operating margin fell to 23.0% from 24.8%. Parker said the result included expenses related to the Filtration Group acquisition.
- Adjusted segment operating margin rose to 27.6% from 27.0%, while adjusted segment operating income increased 22.1% to $674 million.
What changes: Filtration Group is now part of Parker’s business and is included in its fiscal-year outlook. The quarter’s growth also reflected substantial organic expansion, while the North America results show that acquisition-related expenses weighed on reported margin even as adjusted margin improved.