Parker-Hannifin’s second quarter saw a positive market response, driven by continued strength in its Aerospace segment and disciplined cost management across the business. Management attributed the margin expansion to favorable sales mix—particularly in engineered materials and filtration—and emphasized ongoing operational improvements through the company’s Win Strategy. CEO Jennifer Parmentier highlighted the performance of the Aerospace division, noting, “Sales are approximately 2.5x higher than six years ago, and we are on track to expand adjusted segment operating margin by 940 basis points through next year.” The quarter also benefited from improved distributor sentiment and higher quoting activity, particularly in North America, despite modest overall sales growth.
Is now the time to buy PH? Find out in our full research report (it’s free).
Parker-Hannifin (PH) Q2 CY2025 Highlights:
- Revenue: $5.24 billion vs analyst estimates of $5.11 billion (1.1% year-on-year growth, 2.6% beat)
- Adjusted EPS: $7.69 vs analyst estimates of $7.08 (8.6% beat)
- Adjusted EBITDA: $1.37 billion vs analyst estimates of $1.34 billion (26% margin, 2% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $28.90 at the midpoint, in line with analyst estimates
- Operating Margin: 21.3%, up from 20.2% in the same quarter last year
- Organic Revenue rose 2.1% year on year vs analyst estimates of flat growth (138.8 basis point beat)
- Market Capitalization: $97.37 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Parker-Hannifin’s Q2 Earnings Call
- Joseph Alfred Ritchie (Goldman Sachs): Questioned the sequential step-down in Q1 profit guidance. CEO Jennifer Parmentier explained the limited sales growth and higher compensation costs in Q1, but affirmed margin expansion and a record Q1 starting point.
- Jeffrey Todd Sprague (Vertical Research Partners): Asked about the margin and synergy profile of the Curtis Instruments acquisition. CFO Todd Leombruno confirmed initial margin dilution but projected EPS accretion in the first year and synergy realization over three years.
- Amit Singh Mehrotra (UBS): Inquired about the balance between pricing and cost reduction in driving margins. Parmentier highlighted continuous improvement efforts, while Leombruno emphasized the flexibility of Parker-Hannifin’s decentralized operating model.
- Andrew Alec Kaplowitz (Citi): Sought more detail on expected Aerospace growth by market. Parmentier outlined commercial OEM and aftermarket strength, with defense also contributing mid-single-digit gains.
- Julian C.H. Mitchell (Barclays): Queried whether customers were pulling forward orders due to tariffs and how industrial growth would progress. Parmentier stated there was no evidence of pull-forward and described a gradual, regionally mixed industrial recovery.
Catalysts in Upcoming Quarters
Looking ahead, the StockStory team will be monitoring (1) the pace of industrial recovery in both North America and international markets, (2) execution on the Curtis Instruments acquisition and its integration into the electrification portfolio, and (3) the ability to sustain Aerospace backlog growth and margin expansion. Developments in customer order patterns and progress on restructuring efforts will also be key signposts for Parker-Hannifin’s performance.
Parker-Hannifin currently trades at $761.70, up from $696.43 just before the earnings. Is the company at an inflection point that warrants a buy or sell? Find out in our full research report (it’s free).
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