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Parker Hannifin Lifts 2012 Forecast Amid Equipment ‘Boom’

Parker Hannifin Corp., a maker of hydraulic equipment, increased its full-year forecast after posting higher sales and profit amid a gain in North American industrial orders.

Earnings for the fiscal year that began July 1 may be $7.25 to $7.85 a share, up from a previous projection of $6.70 to $7.50 a share, the company said today in a statement. Profit in the three months through September was $1.91 a share, compared with the $1.72 average of seven net-income estimates in a Bloomberg survey.

Orders companywide increased 9 percent from a year earlier, led by gains in the North American industrial business, Parker Hannifin said.

“North America is going to be very strong in the rest of 2011, in this quarter and the next quarter, because we still have an equipment boom that has to be satisfied,” said Eli Lustgarten, an analyst at Independence, Ohio-based Longbow Securities. He has a “neutral” rating on the shares.

Manufacturing in the U.S. accelerated in September, driven by gains in exports and production. Expanding emerging economies such as China and a rebound in Japan following the March earthquake and tsunami may continue to increase demand from overseas.

Parker Hannifin, the second company in the S&P 500 Industrials Index to report earnings this quarter, makes components for fuel and oil systems found in Ford and Harley-Davidson engines and hydraulic parts used in trucks and hospital beds.

Domestic Economy

Parker Hannifin rose 6.1 percent to $77.15 in New York. The shares gained 6.5 percent in the year before today.

The Cleveland-based company’s performance “shows that industrials might be a little more resilient this earnings season,” Jeff Windau, a St. Louis-based analyst at Edward Jones & Co., said in a telephone interview. He upgraded his rating to “buy” from “hold” after the report.

Parker Hannifin’s aerospace products offer good long-term growth opportunities, Windau said.

The company’s net income increased 20 percent to $297 million from $247.2 million, or $1.51 a share, a year earlier. Sales at Parker Hannifin rose 14 percent to $3.23 billion, topping estimates of $3.18 billion.

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