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Parker Reports Fiscal 2013 Third Quarter Results and Increases Dividend



   Parker Reports Fiscal 2013 Third Quarter Results and Increases Dividend

- Third quarter diluted earnings per share $1.68

- Company maintains fiscal 2013 earnings guidance midpoint

- Board approves second consecutive quarterly dividend increase, totaling 10
percent this year

PR Newswire

CLEVELAND, April 25, 2013

CLEVELAND, April 25, 2013 /PRNewswire/ -- Parker Hannifin Corporation (NYSE:
PH), the global leader in motion and control technologies, today reported
results for the fiscal 2013 third quarter ended March 31, 2013 and announced a
5 percent increase in its quarterly cash dividend.  Fiscal 2013 third quarter
sales were $3.30 billion compared with $3.39 billion in the prior year
quarter. Acquisitions contributed 4 percent which was offset by a 6 percent
reduction in organic sales. Net income was $256.6 million in the current
quarter compared with $312.7 million in the third quarter of fiscal 2012. 
Fiscal 2013 third quarter earnings per diluted share were $1.68 compared with
$2.01 in the prior year quarter. 

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

Cash flow from operations for the first nine months of fiscal 2013 was $718.8
million, or 7.5 percent of sales, compared with $1,006.5 million, or 10.3
percent of sales for the first nine months of fiscal 2012. Cash flow from
operations for the first nine months of fiscal 2013 included a $225.6 million
discretionary contribution to the company's pension plan. Excluding this
contribution, cash flow from operations as a percent of sales was 9.9 percent
for the first nine months of fiscal 2013.

The Board of Directors increased the company's regular quarterly cash dividend
to 45 cents per share of common stock and declared a dividend payable June 7,
2013 to shareholders of record as of May 10, 2013. This represents a 5 percent
increase over the previous quarterly dividend of 43 cents per common share and
is the second consecutive increase this year. This is the company's 252nd
consecutive quarterly dividend, resulting in a total distribution to
shareholders of approximately $67 million.

"The fundamentals of our business remain very strong despite a mediocre global
economic environment," said Chairman, CEO and President, Don Washkewicz.  "I
am particularly pleased that we were able to deliver such strong total segment
operating margins of 14 percent this quarter.  We also continue to drive high
levels of operating cash flow, which has allowed us the flexibility to
announce our second consecutive quarterly dividend increase this year. This
puts our fiscal 2013 dividend increase at 10 percent.  We have now extended
our long-standing annual dividend increase record to 57 consecutive fiscal
years, which is among the top five longest running dividend-increase records
in the S&P 500 index, and we have more than doubled our annual payout in the
past five years."

Segment Results

In Industrial North America, third quarter sales decreased 2.4 percent to
$1.28 billion, and operating income was $209.0 million compared with $227.0
million in the same period a year ago.  

In Industrial International, third quarter sales decreased 3.5 percent to
$1.24 billion, and operating income was $152.3 million compared with $195.1
million in the same period a year ago. 

In Aerospace, third quarter sales increased 6.5 percent to $578.0 million, and
operating income was $80.1 million compared with $65.9 million in the same
period a year ago.

In Climate and Industrial Controls, third quarter sales decreased 18.0 percent
to $203.9 million, and operating income was $21.3 million compared with $23.2
million in the same period a year ago.  These results reflect the impact of a
business divestiture in the fiscal 2013 second quarter.

Orders

Parker reported a decrease of 7 percent in orders for the quarter ending March
31, 2013, compared with the same quarter a year ago.  The company reported the
following orders: 

  o Orders declined 10 percent in Industrial North America compared with the
    same quarter a year ago.
  o Orders declined 7 percent in Industrial International compared with the
    same quarter a year ago.
  o Orders were unchanged in Aerospace on a rolling 12-month average basis.
  o Orders declined 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 the
midpoint and narrowed the range of guidance for earnings from continuing
operations to $6.25 to $6.65 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, "We are not anticipating any meaningful change in global
economic conditions through the remainder of the fiscal year.  We will
continue to take actions to drive operating cash flow while at the same time
position ourselves for ongoing profitable growth and strong shareholder
returns."

NOTICE OF CONFERENCE CALL: Parker Hannifin's conference call and slide
presentation to discuss its fiscal 2013 third 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 57 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 - MARCH 31,
2013
CONSOLIDATED STATEMENT
OF INCOME
(Unaudited)               Three Months Ended March   Nine Months Ended March
                          31,                        31,
(Dollars in thousands
except per share          2013         2012          2013         2012
amounts)
Net sales                 $            $             $            $      
                           3,307,041     3,393,563   9,587,471    9,734,276
Cost of sales             2,569,189    2,590,315     7,468,608    7,386,079
Gross profit              737,852      803,248       2,118,863    2,348,197
Selling, general and      379,690      377,479       1,141,912    1,132,635
administrative expenses
Interest expense          23,050       22,313        70,775       69,303
Other (income) expense,   (3,439)      2,629         (31,062)     (5,100)
net
Income before income      338,551      400,827       937,238      1,151,359
taxes
Income taxes              81,959       88,138        259,584      298,169
Net income                256,592      312,689       677,654      853,190
Less:  Noncontrolling     32           615           391          3,332
interests
Net income attributable   $            $             $            $        
to common shareholders    256,560           312,074   677,263      849,858
Earnings per share
attributable to common
shareholders:
   Basic earnings per     $            $             $            $          
share                           1.72                      4.54         5.61
                                        2.07
   Diluted earnings per   $            $             $            $          
share                           1.68                      4.46         5.49
                                        2.01
Average shares
outstanding during        149,287,628  151,017,910   149,191,583  151,472,380
period - Basic
Average shares
outstanding during        152,360,612  154,944,246   151,853,522  154,904,549
period - Diluted
Cash dividends per        $            $             $            $          
common share                      .43                     1.25         1.13
                                        .39
BUSINESS SEGMENT
INFORMATION BY INDUSTRY
(Unaudited)               Three Months Ended March   Nine Months Ended March
                          31,                        31,
(Dollars in thousands)    2013         2012          2013         2012
Net sales
    Industrial:
       North America      $            $             $            $      
                           1,283,649     1,315,357   3,747,401    3,703,526
       International      1,241,464    1,286,751     3,587,315    3,794,678
    Aerospace             578,026      542,760       1,647,765    1,536,757
    Climate &             203,902      248,695       604,990      699,315
Industrial Controls
Total                     $            $             $            $      
                           3,307,041     3,393,563   9,587,471    9,734,276
Segment operating
income
    Industrial:
       North America      $            $             $            $        
                          209,048           226,986   620,154      645,951
       International      152,309      195,065       427,514      569,224
    Aerospace             80,080       65,925        194,150      204,824
   Climate & Industrial   21,324       23,203        51,164       52,818
Controls
Total segment operating   462,761      511,179       1,292,982    1,472,817
income
Corporate general and     41,410       38,377        126,578      142,529
administrative expenses
Income before
interest and other        421,351      472,802       1,166,404    1,330,288
expense
Interest expense          23,050       22,313        70,775       69,303
Other expense             59,750       49,662        158,391      109,626
Income before income      $            $             $            $      
taxes                     338,551           400,827   937,238     1,151,359
CONSOLIDATED BALANCE
SHEET
(Unaudited)                March 31,   June, 30       March 31,
(Dollars in               2013         2012          2012
thousands)
Assets
Current assets:
Cash and cash             $            $             $        
equivalents                1,677,319        838,317   773,459
Accounts receivable,      2,017,126    1,992,284     2,061,501
net
Inventories               1,473,072    1,400,732     1,429,014
Prepaid expenses          136,268      137,429       100,336
Deferred income taxes     134,724      129,352       132,991
Total current assets      5,438,509    4,498,114     4,497,301
Plant and equipment,      1,829,715    1,719,968     1,721,970
net
Goodwill                  3,229,827    2,925,856     2,926,311
Intangible assets, net    1,313,990    1,095,218     1,096,306
Other assets              859,731      931,126       647,236
Total assets              $            $             $    
                           12,671,772  11,170,282    10,889,124
Liabilities and equity
Current liabilities:
Notes payable             $            $             $        
                           1,527,696        225,589   273,907
Accounts payable          1,162,125    1,194,684     1,148,939
Accrued liabilities       838,376      911,931       872,547
Accrued domestic and      120,352      153,809       193,907
foreign taxes
Total current             3,648,549    2,486,013     2,489,300
liabilities
Long-term debt            1,496,026    1,503,946     1,515,217
Pensions and other        1,693,048    1,909,755     848,521
postretirement benefits
Deferred income taxes     127,159      88,091        141,467
Other liabilities         294,582      276,747       308,151
Shareholders' equity      5,409,058    4,896,515     5,577,592
Noncontrolling            3,350        9,215         8,876
interests
Total liabilities and     $            $             $    
equity                     12,671,772  11,170,282    10,889,124
CONSOLIDATED STATEMENT
OF CASH FLOWS
(Unaudited)               Nine Months Ended March
                          31,
(Dollars in thousands)    2013         2012
Cash flows from
operating activities:
Net income                $            $          
                          677,654           853,190
Depreciation and          250,574      244,403
amortization
Stock incentive plan      65,516       64,102
compensation
Net change in
receivables, inventories, (13,743)     (191,071)
and trade payables
Net change in other       (258,332)    85,060
assets and liabilities
Other, net                (2,870)      (49,223)
Net cash provided by      718,799      1,006,461
operating activities
Cash flows from
investing activities:
Acquisitions (net of cash
of $33,932 in 2013 and    (620,647)    (31,004)
$6,802 in 2012)
Capital expenditures      (214,061)    (154,097)
Proceeds from sale of     24,321       15,560
plant and equipment
Proceeds from sale of     72,190       -
business
Other, net                (9,375)      (16,381)
Net cash (used in)        (747,572)    (185,922)
investing activities
Cash flows from
financing activities:
Net payments for common   (125,325)    (312,545)
stock activity
Acquisition of            (1,072)      (147,441)
noncontrolling interests
Net proceeds from debt    1,186,679    47,763
Dividends                 (187,705)    (178,606)
Net cash provided by
(used in) financing       872,577      (590,829)
activities
Effect of exchange rate   (4,802)      (113,717)
changes on cash
Net increase in cash and  839,002      115,993
cash equivalents
Cash and cash
equivalents at beginning  838,317      657,466
of period
Cash and cash             $            $          
equivalents at end of      1,677,319        773,459
period

 

SOURCE Parker Hannifin Corporation

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