Parker Hannifin raises FY27 profit forecast after Q1 profit beat

Parker Hannifin (PH) cut its fiscal 2027 outlook? No. Parker Hannifin (PH) reported record fiscal 2027 first-quarter sales and raised its full-year forecast. Adjusted EPS of $8.90 topped the $8.43 consensus estimate, and sales of $5.99 billion beat the $5.91 billion estimate.

Shares rose 1.8% at 10:14 a.m. ET, from a $910.19 close.

Here's how the company did:

• Revenue: $5.99 billion vs. $5.08 billion a year earlier, above the $5.91 billion consensus estimate
• Adjusted EPS: $8.90 vs. $7.22 a year earlier, topping the $8.43 consensus estimate
• Diluted EPS: $6.92 vs. $6.29 a year earlier
• Net income: $884 million vs. $808 million a year earlier

Sales rose 18% from a year earlier: organic sales increased 11.5%, and acquisitions added 7%.

Segment operating margin was 24.4%, and adjusted segment operating margin reached 28.6%, up 120 basis points from a year earlier.

Revenue has risen in each of the last three quarters, to $5.75 billion in the fourth quarter.

Guidance

Chairman and Chief Executive Officer Jenny Parmentier said the company is “raising our full year fiscal 2027 guidance” after strong first-quarter performance and increased order rates.

The company now expects fiscal 2027 reported EPS of $29.65 to $30.45, or $36.45 to $37.25 on an adjusted basis. It forecasts reported sales growth of 16.0% to 19.0% and organic sales growth of 7.5% to 10.5%. The company also expects adjusted segment operating margin of 27.7% to 28.1% and free cash flow of $3.5 billion to $4.0 billion.

The updated outlook includes Filtration Group Corporation.

Segment results

Diversified Industrial sales rose to $4.15 billion from $3.44 billion a year earlier. Adjusted segment operating margin in North America was 27.6%, up 60 basis points, and in the International businesses it was 27.7%, up 270 basis points.

Aerospace Systems sales were $1.87 billion, up 13.8%. Adjusted segment operating margin was 30.7%, up 70 basis points, and orders drove backlog to a record $13.7 billion.

Acquisition and charges

The company completed its acquisition of Filtration Group Corporation. Acquisitions, net of cash acquired, totaled $9.10 billion in the quarter.

Amortization of acquired intangibles rose to $189 million from $140 million a year earlier. IEEPA tariff-related returns to customers reduced net sales by $27 million.