Parker-Hannifin Corporation
PH · NYSE
Next quarter
Reports Nov 5, 2026.
Consensus is $8.10 EPS for Sep 2026 across 7 estimates, ranging $7.80 to $8.19.
PH Jun 2026
- 11.82%
- $8.29
- $9.27
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Highlights
- Adjusted EPS was a record $9.27, $0.98 above the $8.29 consensus, an 11.82% surprise and 21% above $7.69 a year earlier.
- Quarterly sales rose 9.8% year over year to a record $5.755 billion, including 8.0% organic growth, versus $5.243 billion in Q4 FY2025 and $5.49 billion in Q3 FY2026.
- Profitability reached a 28.0% adjusted segment operating margin, up 110 basis points year over year; reported segment margin was 26.5%, up 260 basis points.
- Aerospace Systems delivered 13.3% organic sales growth to $1.900 billion, with adjusted segment operating margin of 29.8% and backlog rising to a record $8.5 billion.
- Diversified Industrial posted 5.6% organic growth, led by 15.9% growth in Asia Pacific; adjusted segment margin was 27.2%, up from 25.9% a year earlier.
- Orders and backlog strengthened sharply, with company orders up 19% and total backlog reaching a record $12.8 billion; rolling 12-month order growth was 12%.
- Fiscal 2027 guidance calls for 5.5%-8.5% organic sales growth, adjusted segment margin of 27.5%-27.9% and adjusted EPS of $34.25-$35.25.
- Long-term targets were raised after Parker surpassed its prior 27% adjusted segment margin goal in FY2026; the company now targets 30% by FY2031 while retaining 4%-6% organic growth and more than 10% adjusted EPS growth.
- Cash returns and deployment included $4.364 billion of full-year operating cash flow, nearly $2 billion returned to shareholders, completion of the Curtis Instruments acquisition and announced deals for Filtration Group and CIRCOR's commercial and defense aerospace business.
Analysis
Parker Hannifin's fiscal fourth quarter was a broad-based acceleration in growth and margin, capped by an adjusted EPS result of $9.27 versus the $8.29 consensus. Sales increased 9.8% year over year to $5.755 billion, up from $5.243 billion in the year-ago quarter and $5.49 billion in Q3 FY2026. Adjusted EPS rose 21% from $7.69 a year earlier and materially exceeded the prior quarter's reported $7.06 diluted EPS, although the comparison is affected by the company's adjustment framework. Reported net income was $1.091 billion, versus $923 million a year ago and $904 million in Q3.
The print was defined first by operating leverage: adjusted segment margin expanded 110 basis points to 28.0%, despite continued investment and acquisition-related costs. Aerospace was the standout growth engine, with 13.3% organic growth, 29.8% adjusted margin and an $8.5 billion backlog, while industrial markets also improved, particularly in Asia Pacific. Second, orders accelerated to 19% and total backlog reached $12.8 billion, supporting management's view that the industrial recovery is broadening. Parker enters FY2027 guiding to 5.5%-8.5% organic growth and $34.25-$35.25 of adjusted EPS, while raising its FY2031 adjusted margin target by 300 basis points to 30%.
Record earnings and margins
Parker converted stronger demand into significant operating leverage in the June quarter. Sales rose 9.8% year over year to $5.755 billion, while adjusted net income increased 20% to $1.186 billion and adjusted EPS rose 21% to a record $9.27. The result exceeded the $8.29 consensus by $0.98 per share. Reported net income was $1.091 billion and reported diluted EPS was $8.54; adjusted figures exclude the benefit of $84 million in tariff refunds and other items.
- Operating income was $1.474 billion before interest and other expense, up from $1.189 billion in Q4 FY2025; total segment operating income increased 21.5% to $1.524 billion.
- Margin expansion was evident on both bases: reported segment operating margin rose 260 basis points to 26.5%, while adjusted margin increased 110 basis points to 28.0%.
- Full-year performance included sales of $21.499 billion, up 8.3%, adjusted EPS of $32.31, up 18%, and operating cash flow of $4.364 billion, or 20.3% of sales.
Aerospace drives growth
Aerospace Systems remained Parker's strongest operating contributor. Sales increased 13.4% to $1.900 billion, with organic growth of 13.3%. Growth was double digit across all aerospace market segments, and segment operating income rose 28.3% to $522 million. Adjusted segment operating income increased 16.7% to $567 million, producing a 29.8% adjusted margin versus 29.0% a year earlier.
- Backlog reached a record $8.5 billion in Aerospace Systems, giving the segment substantial forward visibility.
- Orders increased 18% in the quarter, extending the segment's rolling 12-month order growth to 18%.
- Full-year scale increased to $7.061 billion of sales and $1.833 billion of segment operating income, compared with $6.185 billion and $1.441 billion respectively in FY2025.
Industrial recovery broadens
Diversified Industrial delivered a more balanced improvement, with sales up 8.1% to $3.855 billion and organic growth of 5.6%. Sales improved across all market verticals. Segment operating income increased 18.3% to $1.002 billion, while adjusted segment operating income rose 13.3% to $1.047 billion and adjusted margin reached a record 27.2%, up from 25.9% a year earlier.
- North America generated $2.221 billion of sales, up 7.0%, with 4.9% organic growth and adjusted margin of 27.4%, up 70 basis points.
- International businesses grew sales 9.5% to $1.634 billion and organic sales 6.5%; Asia Pacific organic growth was 15.9%, compared with 0.6% in EMEA and negative 2.6% in Latin America.
- Orders rose 16% in North America and 24% internationally; on a rolling 12-month basis, order growth was 9% and 10%, respectively.
Orders and FY2027 outlook
The order trajectory was an important forward-looking feature of the quarter. Parker's reported quarterly order rate increased 19%, with gains in every segment. The company will standardize on rolling 12-month order comparisons in FY2027, a change intended to improve the relationship between order rates and near-term organic growth.
- Total backlog rose to a record $12.8 billion, with increases in all segments; Aerospace Systems accounted for $8.5 billion.
- FY2027 sales are expected to grow 5.5%-8.5% organically and on a reported basis, with approximately 0.5% of acquisition contribution offset by approximately 0.5% of currency headwind.
- FY2027 profitability is guided to a 24.5%-24.9% reported segment margin, or 27.5%-27.9% adjusted, and EPS of $30.00-$31.00, or $34.25-$35.25 adjusted.
Portfolio and capital allocation
Parker continued to use its cash generation to reshape the portfolio while returning capital. It completed the Curtis Instruments acquisition and announced agreements to acquire Filtration Group Corporation and CIRCOR International's Commercial and Defense Aerospace business. The two pending transactions are excluded from FY2027 guidance.
- Acquisitions consumed $1.014 billion of cash during FY2026, while capital expenditures were $459 million.
- Shareholder returns totaled nearly $2 billion through repurchases and dividends; the company raised its annual dividend 11%, marking 70 consecutive fiscal years of increases.
- Strategic target Parker raised its FY2031 adjusted segment margin objective by 300 basis points to 30% after exceeding its previous 27% target in FY2026, while maintaining targets for 4%-6% organic growth, a 17% free-cash-flow margin and more than 10% adjusted EPS growth.
