CLEVELAND — On Feb. 3, motion and control technologies supplier Parker Hannifin Corporation reported results for its fiscal 2022 second quarter ended Dec. 31, 2021.
Q2 sales were a second quarter record at $3.82 billion, an increase of 12 percent, compared with $3.41 billion in the second quarter of fiscal 2021. Net income was $387.6 million, compared with $448.4 million in the prior year quarter. Fiscal 2022 second quarter adjusted net income was $582.2 million, compared with $451.6 million in fiscal 2021. Adjustments include an unrealized pre-tax loss of $149 million in the fiscal 2022 second quarter on the deal contingent forward contracts related to the previously announced acquisition of Meggitt plc. Earnings per share were $2.97, compared with $3.42 in the second quarter of fiscal 2021. Adjusted earnings per share increased 29% to $4.46, compared with adjusted earnings per share of $3.45 in the prior year quarter. Fiscal year-to-date cash flow from operations was $1.01 billion, or 13% of sales, compared with $1.35 billion in the prior year period. A reconciliation of non-GAAP measures is included in the financial tables of this press release.
“Our teams executed extremely well in the second quarter in an environment of strong demand against a backdrop of inflationary pressures and supply chain challenges together with disruptions brought on by the ongoing COVID-19 pandemic,” chairman and CEO Tom Williams said. “We delivered record second quarter sales, driven by strong organic growth across all of our businesses and regions. Importantly, we also delivered record total segment operating margin and our adjusted EBITDA margin increased by 180 basis points compared with the prior year period. Our results reflect the impact of The Win Strategy™ and significant changes we have made to our portfolio. Parker team members continue to demonstrate remarkable resiliency and agility as they respond to very dynamic and uncertain circumstances in the global supply chain.”
Segment Results
- Diversified Industrial Segment: North American second quarter sales increased 15% to $1.81 billion and operating income was $337.4 million compared with $281.6 million in the same period a year ago. International second quarter sales increased 11% to $1.40 billion and operating income was $291.6 million compared with $220.2 million in the same period a year ago.
- Aerospace Systems Segment: Second quarter sales increased 6% to $618.4 million and operating income was $114.8 million compared with $90.7 million in the same period a year ago.
Parker reported the following orders for the quarter ending December 31, 2021, compared with the same quarter a year ago:
- Orders increased 12% for total Parker
- Orders increased 17% in the Diversified Industrial North America businesses
- Orders increased 14% in the Diversified Industrial International businesses
- Orders decreased 7%* in the Aerospace Systems Segment on a rolling 12-month average basis.*Aerospace orders increased mid-teens excluding sizable multi-year military orders in the prior period.
Outlook
For the fiscal year ending June 30, 2022, the company assumes organic sales growth of approximately 10 to 12 percent compared with the prior year.
Williams added, “For the remainder of this fiscal year, we expect positive demand trends to continue and are confident in our ability to navigate the Omicron variant and supply chain challenges ahead. We are also encouraged with the progress being made on the regulatory clearances required for the closure of the Meggitt acquisition. With disciplined execution of the Win Strategy 3.0 and the transformation of our portfolio continuing, we remain strongly positioned to deliver sustainable long-term growth and top quartile performance.”
