Parker-Hannifin Corporation

This is our first report on Parker-Hannifin Corporation, a global leader in motion and control technologies. Parker-Hannifin delivered strong operating performance throughout the second quarter of the current fiscal and delivered an all-around beat. Revenue was $4.7 billion, up 22% from the previous year, while organic growth was 10%. Even though numbers turned out better than expected, currency headwinds still exist. Sales were negatively impacted by currency by 4% in the quarter compared to the preceding year. Also, the net impact of the aircraft Wheel and Brake sale and the Meggitt acquisition on their quarterly revenues was a positive 16%. All segments outperformed in terms of margins. Orders are still growing despite some challenging comparisons from the previous year. Sales in North American companies are at $2.1 billion. That sector’s organic growth is 13.5%. Furthermore, Aerospace Systems had outstanding sales, up 84%. Aeronautics saw almost 5% organic growth. Within that industry, operating margins were 20.6%. We initiate coverage on the stock of Parker-Hannifin Corporation with a ‘Hold’ rating.