Fluid power systems manufacturer Parker Hannifin Corp. (PH) on Tuesday reported a 15 percent increase in profit for the first quarter from last year, reflecting higher sales and lower expenses.
Adjusted earnings per share for the quarter beat analysts' expectations. Looking ahead, the company raised the low end of its earnings guidance for fiscal 2015.
Don Washkewicz, Chairman, CEO and President of Parker Hannifin said, "As a result of the restructuring activities we engaged in last year, we are beginning to see stronger year-over-year segment operating margin performance, which reached 15.9 percent this quarter, or 16.1 percent adjusted."
The Cleveland, Ohio-based company's first-quarter net income attributable to shareholders was $280.09 million or $1.85 per share, up from $244.32 million or $1.61 per share in the prior-year quarter.
Excluding restructuring expenses, adjusted earnings per share for the quarter were $1.89, compared to $1.67 per share in the same period last year. On average, 16 analysts polled by Thomson Reuters expected the company to report earnings of $1.67 per share in the quarter. Analysts' estimates typically exclude special items.
Net sales for the quarter grew 1 percent to $3.27 billion from $3.23 billion in the same quarter last year. Adjusted total net sales, excluding sales related to GE joint venture last year, grew 2.9 percent. Analysts' had a consensus revenue estimate of $3.28 billion.
Industrial North American business reported 6 percent growth in sales from the year-ago period to $1.47 billion, while the industrial international business reported a 1 percent decline in sales to $1.26 billion.
Sales for the company's aerospace business decreased 6 percent to $534.62 million, reflecting the impact of the joint venture between Parker Aerospace and GE Aviation recorded in the prior year's second quarter. Adjusted sales for the segment increased 3.2 percent.
Selling, general and administrative expenses for the quarter were $400.84 million, down 1 percent from last year.
Parker Hannifin's total orders for the quarter grew 5 percent from last year.
Looking ahead to fiscal 2015, Parker Hannifin now forecasts earnings per share from continuing operations in a range of $7.20 to $7.80 per share, or $7.45 to $8.05 per share on an adjusted basis. Earlier, the company forecast earnings in a range of $7.00 to $7.80 per share, or $7.25 to $8.05 per share on an adjusted basis.
Street expects the company to earn $7.67 per share for the year.
The company noted that the revised outlook is adjusted for expected restructuring expenses of about $0.25 per share.
Washkewicz added, "Macroeconomic readings indicate some uncertainty in demand levels, particularly internationally. However, savings resulting from the timely and solid execution of our restructuring activities give us confidence that we can achieve our earnings outlook and deliver a record year."
PH closed Monday's trading at $117.24, up $0.67 or 0.57 percent on a volume of 1.81 million shares.
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