Parker Hannifin Beats Q1, Raises Outlook; Filtration Deal Targets 30% EBITDA by 2030

Parker Hannifin Corp. (NYSE:PH) reported fiscal first-quarter 2027 results Thursday, with adjusted EPS of $8.90, beating the
Street’s view for $8.19, and sales of $5.992 billion, topping the $5.735 billion estimate.

The company’s shares traded higher after the results, with investors reacting to the quarterly beat and Parker’s raised fiscal 2027 adjusted EPS and sales guidance above expectations.

Record Sales And Margin Expansion

Sales rose 18% to $5.992 billion from $5.084 billion a year earlier, including 11.5% organic growth. GAAP diluted EPS rose 10% to $6.92 from $6.29, while adjusted EPS increased 23% to a record $8.90 from $7.22.

Net income rose to $884 million from $808 million, and adjusted net income increased to $1.138 billion from $927 million.

Adjusted segment operating margin reached a record 28.6%, up 120 basis points from 27.4%.

Adjusted EBITDA margin was 28.5%, compared with 27.3% a year earlier.

"We experienced increased demand across all market verticals, resulting in double-digit organic sales growth and record backlog levels. Strong market conditions, combined with execution of The Win Strategy, delivered record adjusted segment operating margin of 28.6% and adjusted earnings per share growth of 23%,” said Chief Executive Jenny Parmentier.

Industrial And Aerospace Businesses Drive Growth

Diversified Industrial North America sales rose 19.6% to $2.445 billion, with adjusted segment margin of 27.6%, up 60 basis points.

International sales increased 22% to $1.707 billion, with adjusted margin rising 270 basis points to 27.7%.

Aerospace Systems sales rose 13.8% to $1.867 billion, while adjusted margin increased 70 basis points to 30.7%.

Rolling 12-month orders increased 13% overall, including 11% growth in North America, 14% internationally, and 14% in Aerospace.

Backlog reached a record $13.7 billion. Parker also completed its Filtration Group acquisition, with integration underway.

Filtration Adds Growth And Synergy Potential

Parker expects about $1.85 billion in Filtration Group sales in fiscal 2027 and targets more than a 30% adjusted EBITDA margin by fiscal 2030, supported by cumulative expected cost synergies of $220 million.

Operating cash flow was $752 million and free cash flow was $643 million.

Cash totaled $711 million, while gross debt was $17.559 billion and net debt stood at $16.843 billion.

Parker Raises Adjusted Outlook

Parker raised its fiscal 2027 adjusted EPS guidance to $36.45-$37.25 from $34.25-$35.25, above the $35.55 consensus.

The company also lifted sales guidance to $24.939 billion-$25.584 billion from $22.681 billion-$23.326 billion, above the $24.352 billion estimate.

However, it lowered GAAP EPS guidance to $29.65-$30.45 from $30.00-$31.00, below the $31.32 estimate.

The company also raised organic sales growth guidance to 7.5%-10.5% from 5.5%-8.5% and adjusted segment margin guidance to 27.7%-28.1% from 27.5%-27.9%.

Free cash flow guidance increased to $3.5 billion-$4.0 billion from $3.4 billion-$3.9 billion.

The quarter included $21 million of net tariff refunds.

PH Price Action: Parker Hannifin shares were up 0.73% at $916.81 Thursday, according to Benzinga Pro data.

Parker Hannifin-Photo by JHVEPhoto via Shutterstock