Parker-Hannifin Corporation (PH) reported fourth quarter and fiscal 2014 financial results. For the fourth quarter, the company reported adjusted earnings per share of $2.06 which missed the Zacks Consensus Estimate by a penny. However, quarterly earnings were up 15.7% year over year.
Total Revenue
Total revenue in the fourth quarter increased 3% year over year to $3.53 billion versus $3.43 billion in the prior-year quarter. Revenues fell short of the Zacks Consensus Estimate of $3.57 billion.
For the fourth quarter, the company reported a 4% increase in orders, reflecting the fourth consecutive quarter of order growth.
Segment Performance
Parker’s Industrial Sales segment comprises two sub-segments – Industrial North America and Industrial International.
Industrial North America revenues increased 4% year over year to $1.53 billion. Operating income also increased 7.6% to $268.7 million in the quarter. Meanwhile, the segment reported a 6% year-over-year increase in orders.
Industrial International sales were up 3.1% to $1.38 billion. Operating income, adjusted for restructuring expenses, declined 15.1% year over year to $138 million. On the other hand, orders for the segment grew 4% year over year.
Revenues in the Aerospace segment remained flat year over year at $617 million, despite a healthy 17% increase in orders. The decrease can be primarily attributed to the negative impact of the company’s joint venture business with GE Aviation. Operating income stood at $104.9 million compared with $86.1 million in the same quarter a year ago.
Balance Sheet
At the end of the year, Parker’s cash and cash equivalents stood at $1.6 billion, compared with $1.8 billion a year ago. The company’s long-term debt stood at $1.5 billion at year-end.
Further, net cash from operating activities for fiscal 2014 improved 16.5% year over year to $1.4 million on higher net income and asset impairment. Capital expenditures for the year totaled $216.3 million.
Guidance for Fiscal 2014
The company guides earnings in the range of $7.00 to $7.80 and $7.25 to $8.05 on an adjusted basis for fiscal 2015. The earnings guidance includes the adjustment of restructuring expenses of approximately 25 cents a share.
Other Stocks to Consider
Parker’s shares carry a Zacks Rank #3 (Hold), so it may not be an ideal investment option right now. However, you may consider better-ranked stocks such as DXP Enterprises (DXPE), IDEX Corp. (IEX) and Ingersoll Rand (IR). All three carry a Zacks Rank #2 (Buy).
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