Parker Reports Fiscal 2013 Second Quarter Sales, Net Income and Earnings per Share

 Parker Reports Fiscal 2013 Second Quarter Sales, Net Income and Earnings per
                                    Share

- Diluted earnings per share reach $1.19

- Company maintains fiscal 2013 earnings outlook

PR Newswire

CLEVELAND, Jan. 18, 2013

CLEVELAND, Jan. 18, 2013 /PRNewswire/ -- Parker Hannifin Corporation (NYSE:
PH), the global leader in motion and control technologies, today reported
results for the fiscal 2013 second quarter ended December 31, 2012.  Fiscal
2013 second quarter sales of $3.07 billion were essentially flat compared with
$3.11 billion in the prior year quarter. Acquisitions contributed 4 percent to
sales which was largely offset by a reduction in organic sales, particularly
internationally. Net income was $181.1 million compared with $242.3 million in
the second quarter of fiscal 2012, primarily reflecting reduced organic sales
volume.  Fiscal 2013 second quarter earnings per diluted share were $1.19
compared with $1.56 in the prior year quarter. 

(Logo: http://photos.prnewswire.com/prnh/19990816/PHLOGO ) 

Cash flow from operations for the first six months of fiscal 2013 was $347.3
million, or 5.5 percent of sales, compared with $563.4 million, or 8.9 percent
of sales for the first six months of fiscal 2012. Cash flow from operations
for the first six months of fiscal 2013 included a $225.6 million
discretionary contribution to the company's pension plan. Excluding this
discretionary contribution, cash flow from operations as a percent of sales
was 9.1 percent for the first six months of fiscal 2013.

"We performed well in the second quarter considering continued economic
weakness across all the regions we operate in," said Chairman, CEO and
President, Don Washkewicz.  "Although economic conditions may improve, we
continued to take prudent actions to strengthen profitability and cash flow as
we enter the second half of the year, including cost reduction initiatives and
adjustments to planned capital expenditures."

Segment Results

In Industrial North America, second quarter sales increased 1.2 percent to
$1.2 billion, and operating income was $183.9 million compared with $195.7
million in the same period a year ago.  

In Industrial International, second quarter sales decreased 4.1 percent to
$1.17 billion, and operating income was $123.4 million compared with $165.9
million in the same period a year ago. 

In Aerospace, second quarter sales increased 6.5 percent to $528.7 million,
and operating income was $52.2 million compared with $70.3 million in the same
period a year ago.

In Climate and Industrial Controls, second quarter sales decreased 18.3
percent to $170.2 million, reflecting the impact of a business divestiture,
and operating income was $8.1 million compared with $9.8 million in the same
period a year ago.   

Orders

Parker reported a decrease of 2 percent in orders for the quarter ending
December 31, 2012, compared with the same quarter a year ago.  The company
reported the following orders: 

  o Orders declined 6 percent in Industrial North America compared with the
    same quarter a year ago.
  o Orders declined 5 percent in Industrial International compared with the
    same quarter a year ago.
  o Orders increased 14 percent in Aerospace on a rolling 12-month average
    basis.
  o Orders increased 1 percent in Climate and Industrial Controls compared
    with the same quarter a year ago.

Outlook

For the fiscal year ending June 30, 2013, the company has maintained guidance
for earnings from continuing operations in the range of $6.15 to $6.75 per
diluted share.  Fiscal 2013 guidance includes an expected year-over-year
increase in domestic qualified pension expense of approximately $0.35 per
diluted share due to accounting regulations which require the use of a lower
discount rate based on current market conditions. 

Washkewicz added, "Following the natural, annual cycle of our business, we
anticipate that the second half of our fiscal year will be stronger than the
first half.  In addition, ongoing actions to reduce costs and maintain cash
flow should position us for a strong finish to fiscal year 2013."

NOTICE OF CONFERENCE CALL: Parker Hannifin's conference call and slide
presentation to discuss its fiscal 2013 second quarter results are available
to all interested parties via live webcast today at 10:00 a.m. ET, on the
company's investor information web site at www.phstock.com.  To access the
call, click on the "Live Webcast" link. From this link, users also may
complete a pre-call system test and register for e-mail notification of future
events and information available from Parker.  A replay of the conference call
will also be available at www.phstock.com for one year after the call.

With annual sales exceeding $13 billion in fiscal year 2012, Parker Hannifin
is the world's leading diversified manufacturer of motion and control
technologies and systems, providing precision-engineered solutions for a wide
variety of mobile, industrial and aerospace markets. The company employs
approximately 60,000 people in 48 countries around the world. Parker has
increased its annual dividends paid to shareholders for 56 consecutive fiscal
years, among the top five longest-running dividend-increase records in the S&P
500 index. For more information, visit the company's web site at
www.parker.com or its investor information web site at www.phstock.com.

Notes on Orders

Orders provide near-term perspective on the company's outlook, particularly
when viewed in the context of prior and future quarterly order rates. However,
orders are not in themselves an indication of future performance. All
comparisons are at constant currency exchange rates, with the prior year
restated to the current-year rates. All exclude acquisitions until they can be
reflected in both the numerator and denominator. Aerospace comparisons are
rolling 12-month average computations. The total Parker orders number is
derived from a weighted average of the year-over-year quarterly percent change
in orders for Industrial North America, Industrial International, and Climate
and Industrial Controls, and the year-over-year 12-month rolling average of
orders for Aerospace.

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. All statements regarding future performance, earnings projections,
events or developments are forward-looking statements. It is possible that the
future performance and earnings projections of the company, including its
individual segments, may differ materially from current expectations,
depending on economic conditions within its mobile, industrial and aerospace
markets, and the company's ability to maintain and achieve anticipated
benefits associated with announced realignment activities, strategic
initiatives to improve operating margins, actions taken to combat the effects
of the current economic environment, and growth, innovation and global
diversification initiatives. A change in the economic conditions in individual
markets may have a particularly volatile effect on segment performance. Among
other factors which may affect future performance are: changes in business
relationships with and purchases by or from major customers, suppliers or
distributors, including delays or cancellations in shipments, disputes
regarding contract terms or significant changes in financial condition,
changes in contract cost and revenue estimates for new development programs
and changes in product mix; ability to identify acceptable strategic
acquisition targets; uncertainties surrounding timing, successful completion
or integration of acquisitions; ability to realize anticipated cost savings
from business realignment activities; threats associated with and efforts to
combat terrorism; uncertainties surrounding the ultimate resolution of
outstanding legal proceedings, including the outcome of any appeals;
competitive market conditions and resulting effects on sales and pricing;
increases in raw material costs that cannot be recovered in product pricing;
the company's ability to manage costs related to insurance and employee
retirement and health care benefits; and global economic factors, including
manufacturing activity, air travel trends, currency exchange rates,
difficulties entering new markets and general economic conditions such as
inflation, deflation, interest rates and credit availability. The company
makes these statements as of the date of this disclosure, and undertakes no
obligation to update them unless otherwise required by law.

 

PARKER HANNIFIN CORPORATION - DECEMBER 31, 2012
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)               Three Months Ended         Six Months Ended December
                          December 31,               31,
(Dollars in thousands     2012         2011          2012          2011
except per share amounts)
Net sales                 $            $             $             $      
                           3,065,495     3,106,832   6,280,430     6,340,713
Cost of sales             2,421,972    2,381,322     4,899,419     4,795,764
Gross profit              643,523      725,510       1,381,011     1,544,949
Selling, general and      381,100      368,690       762,222       755,156
administrative expenses
Interest expense          24,216       23,769        47,725        46,990
Other (income), net       (24,422)     (5,896)       (27,623)      (7,729)
Income before income      262,629      338,947       598,687       750,532
taxes
Income taxes              81,515       96,604        177,625       210,031
Net income                181,114      242,343       421,062       540,501
Less:  Noncontrolling     152          1,577         359           2,717
interests
Net income attributable   $            $             $             $        
to common shareholders    180,962           240,766   420,703       537,784
Earnings per share
attributable to common
shareholders:
   Basic earnings per     $            $             $             $          
share                           1.21                      2.82          3.55
                                        1.59
   Diluted earnings per   $            $             $             $          
share                           1.19                      2.77          3.47
                                        1.56
Average shares
outstanding during        149,001,273  150,960,202   149,143,561   151,699,614
period - Basic
Average shares
outstanding during        152,198,704  154,717,211   152,018,025   155,024,479
period - Diluted
Cash dividends per        $            $             $             $          
common share                      .41                       .82           .74
                                        .37
BUSINESS SEGMENT
INFORMATION BY INDUSTRY
(Unaudited)               Three Months Ended         Six Months Ended December
                          December 31,               31,
(Dollars in thousands)    2012         2011          2012          2011
Net sales
    Industrial:
       North America      $            $             $             $      
                           1,197,705     1,183,352   2,463,752     2,388,169
       International      1,168,961    1,218,812     2,345,851     2,507,927
    Aerospace             528,656      496,505       1,069,739     993,997
    Climate &             170,173      208,163       401,088       450,620
Industrial Controls
Total                     $            $             $             $      
                           3,065,495     3,106,832   6,280,430     6,340,713
Segment operating
income
    Industrial:
       North America      $            $             $             $        
                          183,914           195,738   411,106       418,965
       International      123,434      165,940       275,205       374,159
    Aerospace             52,172       70,262        114,070       138,899
   Climate & Industrial   8,130        9,823         29,840        29,615
Controls
Total segment operating   367,650      441,763       830,221       961,638
income
Corporate general and     45,401       46,136        85,168        104,152
administrative expenses
Income before
interest                  322,249      395,627       745,053       857,486
expense and
other expense
Interest expense          24,216       23,769        47,725        46,990
Other expense             35,404       32,911        98,641        59,964
Income before income      $            $             $             $        
taxes                     262,629           338,947   598,687       750,532
CONSOLIDATED BALANCE
SHEET
(Unaudited)                December    June, 30       December
                          31,                        31, 
(Dollars in               2012         2012          2011
thousands)
Assets
Current assets:
Cash and cash             $            $             $        
equivalents               497,635           838,317   487,984
Accounts receivable,      1,802,405    1,992,284     1,828,117
net
Inventories               1,515,325    1,400,732     1,452,664
Prepaid expenses          152,477      137,429       129,439
Deferred income taxes     127,905      129,352       144,819
Total current assets      4,095,747    4,498,114     4,043,023
Plant and equipment,      1,844,643    1,719,968     1,691,162
net
Goodwill                  3,295,141    2,925,856     2,879,169
Intangible assets, net    1,367,978    1,095,218     1,101,020
Other assets              857,852      931,126       613,210
Total assets              $            $             $    
                           11,461,361  11,170,282    10,327,584
Liabilities and equity
Current liabilities:
Notes payable             $            $             $          
                          510,006           225,589   78,375
Accounts payable          1,073,233    1,194,684     1,069,503
Accrued liabilities       810,546      911,931       821,335
Accrued domestic and      94,475       153,809       150,896
foreign taxes
Total current             2,488,260    2,486,013     2,120,109
liabilities
Long-term debt            1,509,238    1,503,946     1,659,434
Pensions and other        1,704,349    1,909,755     838,644
postretirement benefits
Deferred income taxes     128,892      88,091        147,123
Other liabilities         301,633      276,747       306,371
Shareholders' equity      5,325,717    4,896,515     5,158,126
Noncontrolling            3,272        9,215         97,777
interests
Total liabilities and     $            $             $    
equity                     11,461,361  11,170,282    10,327,584
CONSOLIDATED STATEMENT
OF CASH FLOWS
(Unaudited)               Six Months Ended December
                          31,
(Dollars in thousands)    2012         2011
Cash flows from
operating activities:
Net income                $            $          
                          421,062           540,501
Depreciation and          163,827      164,131
amortization
Stock incentive plan      46,527       44,462
compensation
Net change in
receivables, inventories, 102,612      (94,532)
and trade payables
Net change in other       (408,895)    (75,129)
assets and liabilities
Other, net                22,205       (16,017)
Net cash provided by      347,338      563,416
operating activities
Cash flows from
investing activities:
Acquisitions (net of cash
of $33,160 in 2012 and    (621,716)    (13,652)
$6,802 in 2011) 
Capital expenditures      (140,221)    (96,897)
Proceeds from sale of     14,173       11,179
plant and equipment
Proceeds from sale of     68,569       -
business
Other, net                (7,765)      (14,498)
Net cash (used in)        (686,960)    (113,868)
investing activities
Cash flows from
financing activities:
Net payments for common   (101,160)    (308,747)
stock activity
Acquisition of            (1,072)      (76,893)
noncontrolling interests
Net proceeds from         168,712      (1,089)
(payments for) debt
Dividends                 (123,328)    (119,031)
Net cash (used in)        (56,848)     (505,760)
financing activities
Effect of exchange rate   55,788       (113,270)
changes on cash
Net decrease in cash and  (340,682)    (169,482)
cash equivalents
Cash and cash
equivalents at beginning  838,317      657,466
of period
Cash and cash             $            $          
equivalents at end of     497,635           487,984
period

SOURCE Parker Hannifin Corporation

Website: http://www.phstock.com
Contact: Media - Christopher M. Farage - Vice President, Communications &
External Affairs, +1-216-896-2750, cfarage@parker.com, Financial Analysts -
Pamela Huggins, Vice President - Treasurer, +1-216-896-2240,
phuggins@parker.com