Parker Hannifin Corp. reported record results for the fiscal 2011 second quarter ending December 31, 2010. Fiscal 2011 second quarter sales were $2.9 billion, an increase of 21.7% from $2.4 billion in the same quarter a year ago. Net income was $231.8 million an increase of 120.9% from $105.0 million in the second quarter of fiscal 2010. Earnings per diluted share for the quarter were $1.39 compared with $0.64 in last year’s second quarter. Cash flow from operations for the first six months of fiscal 2011 was $408.2 million, or 7.2% of sales, compared with cash flow from operations of $606.3 million, or 13.2% of sales in the prior year period. Cash flow from operations in the first six months of fiscal 2011 included a $200 million discretionary contribution to the company’s pension plan. Excluding this discretionary contribution, cash flow from operations as a percent of sales was 10.7% for the first six months of fiscal 2011.
“Demand levels remain strong across many markets, resulting in a significant increase in sales for the second quarter and increased order levels relative to the prior year period,” said Chairman, CEO and President Don Washkewicz. “We were able to deliver sales increases in every segment, as total organic sales increased 22%. Order rates also increased in all segments and we are particularly pleased to see demand levels recover in our aerospace segment.”
“This was another quarter that demonstrated our ability to leverage our strong revenue performance into increased operating margins and earnings. Our total segment operating margin performance was 14.0%, led by Industrial North America segment margin of 15.2% and Industrial International segment margin of 14.6%.”
Segment results
In the Industrial North America segment, second quarter sales increased 23.4% to $1.0 billion, and operating income was $159.4 million compared with $114.4 million in the same period a year ago. In the Industrial International segment, second quarter sales increased 23.1% to $1.1 billion, and operating income was $167.8 million compared with $82.6 million in the same period a year ago. In the Aerospace segment, second quarter sales increased 14.7% to $459.6 million, and operating income was $63.6 million compared with $41.0 million in the same period a year ago. In the Climate and Industrial Controls segment, second quarter sales increased 22.6% to $214.3 million, and operating income was $9.5 million compared with $6.1 million in the same period a year ago.
Orders
Parker reported an increase of 29% in total orders for the quarter ending December 31, 2010, compared with the same quarter a year ago. The company reported the following orders by operating segment:
Orders increased 26% in the Industrial North America segment, compared with the same quarter a year ago.
Orders increased 29% in the Industrial International segment, compared with the same quarter a year ago.
Orders increased 37% in the Aerospace segment on a rolling 12-month average basis.
Orders increased 26% in the Climate and Industrial Controls segment, compared with the same quarter a year ago.
Outlook
For fiscal 2011, the company has increased guidance for earnings from continuing operations to the range of $5.80 to $6.20 per diluted share.
Washkewicz added, “Our performance in the first half of this year has been very strong and puts us ahead of where we expected to be. Therefore, we are increasing our full year guidance for earnings per share in fiscal 2011. By executing the Win Strategy, our employees will continue to build from a position of great strength and we remain confident about our prospects for growth and profitability in the coming years.”
