Parker-Hannifin 2025 Q4 Earnings Strong Performance as Net Income Surges 17.6%

Parker-Hannifin reported a strong Q4 performance, with net income up 17.6% year-over-year, exceeding expectations and signaling sustained profitability. The company also raised its FY2026 guidance, reflecting confidence in continued margin expansion and operational resilience.

Revenue
Parker-Hannifin reported total revenue of $5.24 billion in Q4 2025, a 1.1% increase from $5.19 billion in the same period in 2024. The Diversified Industrial segment contributed $3.57 billion, while the Aerospace Systems segment reported revenue of $1.68 billion. Together, these two segments accounted for the full $5.24 billion in net sales.

Earnings/Net Income
Earnings per share (EPS) rose 18.9% year-over-year to $7.25 in Q4 2025, driven by a 17.6% increase in net income to $923 million. This growth reflects the company’s long-term profitability and strategic focus on margin expansion, as Parker-Hannifin has remained profitable for over two decades in this quarter alone.

Price Action
In the latest trading day, Parker-Hannifin's stock edged down 0.55%, while declining 0.89% over the most recent full week. However, the stock has shown resilience with a 2.61% increase month-to-date.

Post-Earnings Price Action Review
A strategy of buying Parker-Hannifin shares 30 days after its quarterly earnings release has proven highly effective in recent years, delivering a 154.22% return over the past three years. This significantly outperformed the benchmark return of 68.19%, with an excess return of 86.03%. The strategy's CAGR of 41.09% indicates its ability to consistently generate strong returns.

CEO Commentary
Jennifer Parmentier, CEO, emphasized the success of Parker-Hannifin’s Win Strategy, noting a 17% reduction in recordable incidents, 190 bps of Aerospace margin expansion, and 90 bps in Industrial. She highlighted the balanced Aerospace portfolio (51% aftermarket, 49% OEM) and long-term transformation toward secular and longer-cycle revenue. Parmentier also announced the acquisition of Curtis Instruments, which enhances electrification capabilities and reinforces Parker’s focus on secular growth.

Guidance
Parker-Hannifin guided to FY 2026 with reported sales growth of 2% to 5%, organic growth of 1.5% to 4.5%, and $28.90 adjusted EPS at midpoint, representing 6% growth. The company expects adjusted segment operating margin to increase by 40 bps to 26.5%, with free cash flow projected between $3 billion and $4 billion. Q1 guidance includes 0.5% reported sales growth, 2% organic growth, 26.1% adjusted segment margins, and $6.51 adjusted EPS.

Additional News
Parker-Hannifin announced its agreement to acquire Curtis Instruments, Inc., expanding its electrification capabilities. The company also reported $851 million in share repurchases during Q4 and raised its quarterly cash dividend by 10%. The firm expects to continue its strong cash flow generation and capital deployment strategy into FY 2026, with an outlook of $3.8 billion in operating cash flow. Management remains confident in the resilience of its portfolio and the effectiveness of its Win Strategy, which has driven margin expansion and operational improvements. With a transformed portfolio and robust Aerospace growth, Parker-Hannifin aims to deliver another year of exceptional performance.