Parker-Hannifin Corporation

What they do

Parker-Hannifin designs, manufactures, and provides aftermarket support for highly engineered motion-control systems and components. The company operates through two reportable segments: Diversified Industrial (69% of fiscal 2025 net sales) and Aerospace Systems (31%). Its products serve markets including aerospace & defense, in-plant & industrial equipment, transportation, off-highway, energy, and HVAC & refrigeration.

Revenue drivers

• Diversified Industrial Segment — Sells a broad range of motion-control systems and components to OEMs and distributors; accounted for 69% of fiscal 2025 net sales ($19.9 billion total).
• Aerospace Systems Segment — Sells airframe and engine components and systems to OEMs and aftermarket parts/maintenance; accounted for 31% of fiscal 2025 net sales.
• North America Businesses — Within Diversified Industrial, recorded Q4 FY26 sales of $2.2 billion, up 7.0% (4.9% organic), with all market verticals improving.
• International Businesses — Within Diversified Industrial, recorded Q4 FY26 sales of $1.6 billion, up 9.5% (6.5% organic).

Recent performance

For fiscal 2026 (year ended June 30, 2026), Parker reported record sales of $21.5 billion, up 8.3% (organic +6.6%). Net income was $3.6 billion, EPS $28.48, and adjusted EPS $32.31 (up 18%). Q4 FY26 sales grew 9.8% to $5.8 billion, with adjusted EPS of $9.27 (up 21%). Cash flow from operations was a record $4.4 billion (20.3% of sales). The company returned nearly $2 billion to shareholders via buybacks and dividends.

Strategy

Parker executes The Win Strategy, focusing on engaged people, customer experience, profitable growth, and financial performance. The company is integrating accretive acquisitions, including Curtis Instruments, and has announced deals for Filtration Group and CIRCOR's aerospace business. Management raised its adjusted segment operating margin target to 30% by fiscal 2031, and remains committed to 4-6% organic growth, 17% free cash flow margin, and >10% adjusted EPS growth.

Risks

• Macroeconomic sensitivity — Downturns in manufacturing, air travel, or other end markets could reduce sales and profitability.
• Tariff and trade policy uncertainty — The U.S. Supreme Court ruled IEEPA tariffs unauthorized, and the company has not recorded a receivable for tariffs paid, creating potential refund uncertainty.
• Geopolitical and supply chain risks — Conflicts in the Middle East and other tensions could disrupt supply chains and raise commodity, energy, and logistics costs.
• Integration risk from acquisitions — Pending and recent acquisitions (Filtration Group, CIRCOR, Curtis) may not integrate as expected, potentially affecting margins and growth.

Outlook

For fiscal 2027, Parker expects reported and organic sales growth of 5.5% to 8.5%, with acquisitions adding 0.5% and currency a 0.5% headwind. The company guides to segment operating margin of 24.5-24.9% (27.5-27.9% adjusted) and EPS of $30.00-$31.00 ($34.25-$35.25 adjusted). Guidance excludes pending acquisitions, and management sees broadening industrial recovery and positive organic growth across all verticals.