Aug. 2 (Bloomberg) -- Parker Hannifin Corp., the maker of fluid power systems and air-conditioning products, tumbled after forecasting lower profit in fiscal 2012 than some analysts estimate.
Parker Hannifin’s profit prediction of $6.70 to $7.50 per share has a midpoint of $7.10, trailing the $7.50 average of 15 estimates in a Bloomberg survey. The Cleveland, Ohio-based company said its outlook reflects the potential for broader economic trends to pull growth rates below 10 percent in the second half of the year.
“When we go into a fiscal year, you know, we budget tight,” Chief Executive Officer Don Washkewicz told investors and analysts on an earnings conference call. “We don’t want all the operations spending as if we’re running at the top end of our guidance or anything like that. We can always adjust budgets as we go through the year.”
Parker Hannifin slid $6.58, or 8.5 percent, to $70.88, at 4:15 p.m. in New York Stock Exchange composite trading, the largest decline since December 2008.
Profit in the three months through June climbed 32 percent to $292.2 million, or $1.79 a share, the company said in a statement. That trailed an average estimate of $1.80 and included 14 cents a share from a lower tax rate and 4 cents from fewer shares following a buyback, said Stephen Volkmann, a New York-based analyst with Jefferies Group Inc.
“The in-line earnings results were supplemented by 18 cents of unexpected benefit,” which Volkmann told clients in a note might cause the shares to decline. He has a “hold” rating on the stock. “Margins in all four segments fell short of our expectations.”
The profit margin of 11.9 percent before interest and taxes trailed Jefferies’ projection of 13.3 percent, Volkmann wrote.
To contact the reporter on this story: Alex Barinka in New York at firstname.lastname@example.org.
To contact the editor responsible for this story: Ed Dufner at email@example.com