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- **Record Q2 Performance**: $5.2 billion sales, 6.6% organic growth, and 27.1% adjusted margin, with EPS up 17%.
- **Acquisition Momentum**: Filtration Group deal to add $220M synergies and expand aftermarket reach.
- **Guidance Uptick**: FY '26 EPS raised to $30.70 midpoint, driven by Aerospace (11% growth) and Off-Highway recovery.
- **Cash Flow Strength**: $1.6B cash flow from ops, 100%+ free cash flow conversion, and disciplined capital allocation.

**【CEO Summary Section】**
- Recorded Q2 sales of $5.2 billion, with 6.6% organic growth and 150 basis points of margin expansion, resulting in 27.1% adjusted segment operating margin.
- Announced acquisition of Filtration Group Corporation, expected to close in 6-12 months, adding $220 million in cost synergies and enhancing aftermarket presence.
- Raised FY '26 organic sales growth guidance to 5% midpoint, driven by Aerospace (11% growth) and Off-Highway (positive low single-digit growth).

**【CFO Financial Commentary】**
- Q2 adjusted EPS of $7.65, up 17% YoY, with $1.6 billion cash flow from operations and $1.5 billion free cash flow.
- Full-year guidance updated to $30.70 EPS (midpoint), 5.5%-7.5% reported sales growth, and 27.2% adjusted segment operating margin.
- Emphasized strong cash flow conversion (>100%) and disciplined capital allocation, including $415 million interest expense and $85 million other expenses.

**【Q&A Key Highlights】**
- **Market Trends**: Europe turned to positive organic growth in Q2; Asia Pac remains strong, while North America faces selective CapEx but benefits from Aerospace and Off-Highway recovery.
- **Margins**: Industrial businesses achieved 52% incrementals in Q2, with guidance for 40% full-year incrementals, driven by operational excellence and pricing discipline.
- **Filtration Group**: Synergies target $220 million by year 3; no modeled revenue synergies, but potential upside from combined customer relationships and distribution networks.
- **Tariffs**: No material impact on margins, with focus on managing volatility and maintaining record performance.

Parker-Hannifin Corporation (PH) Q2 2026 Earnings Call Transcript

- **Record Q1 Performance**: $5.1B revenue (+5% organic), 27.4% segment margin, and $7.22 EPS (16% growth).
- **Aerospace Dominance**: 9.5% organic growth, 30% margin, and record backlog.
- **Guidance Uptick**: FY26 organic growth raised to 4%, with HVAC/refrigeration at mid-single digits.
- **Cash Flow Strength**: $693M Q1 free cash flow, $3.1-3.5B FY26 target.
- **Curtis Synergies**: $235M in sales, 50-50 NA/International split, and filtration tech wins.


**【CEO Summary Section】**
- Q1 2026 revenue reached $5.1 billion, a 5% organic growth driven by Aerospace and Defense, with North America Industrial posting 2% organic growth (vs. prior guidance of -1%).
- Adjusted segment operating margin expanded 170bps to 27.4%, with Aerospace hitting a record 30% margin due to strong aftermarket and OE demand.
- Completed acquisition of Curtis Instruments, adding $235M in annualized sales and enhancing filtration and energy solutions.
- Raised FY26 organic growth guidance to 4% (midpoint), with Aerospace forecast at 9.5% and HVAC/refrigeration at mid-single digits.

**【CFO Financial Commentary】**
- Adjusted EPS grew 16% to $7.22, driven by $132M increase in segment operating income and $475M in share buybacks.
- Free cash flow reached $693M (13.6% of sales), with FY26 guidance raised to $3.1-3.5B.
- Interest expense increased by $30M due to Curtis acquisition, but tax rate remained stable at 22.5%.
- Q2 2026 EPS guidance is $7.10, reflecting typical seasonal softness in Aerospace OE.

**【Q&A Highlights】**
- **North America Industrial Recovery**: 2% organic growth in Q1, driven by aerospace and defense, with gradual improvement in construction and filtration wins.
- **Aerospace Margin Resilience**: 30% Q1 margin (vs. 29.5% FY26 target) due to spares, with 29.1% Q2 guidance despite 51% OE mix.
- **M&A Strategy**: Curtis integration on track, with 50-50 split between NA and International sales, and potential for higher-margin synergies.
- **Tariff Impact**: Teams maintain pricing discipline, recovering costs without margin expansion, but selective CapEx delays persist.
- **Energy Growth**: Power gen backlog supports 27.4% segment margin, with gas turbine aftermarket offsetting oil/gas weakness.


Parker-Hannifin Corporation (PH) Q1 2026 Earnings Call Transcript

- **Record FY25 Performance**: $19.9B sales, 26.1% adjusted margin, $3.8B CFOA, and $11B backlog.
- **FY26 Guidance**: 2-5% sales growth, 6% EPS growth to $28.90, and $3-4B free cash flow.
- **Aerospace Dominance**: 8% organic growth forecast, 29% segment margin, and $7.4B backlog.
- **Curtis Acquisition**: EPS accretive in FY26 with $50M synergies; expands electrification portfolio.
- **Industrial Recovery**: 1% FY26 growth, 26.5% adjusted margin, and distributor optimism despite macro challenges.

**【CEO Summary Section】**
- Fiscal 2025 was a record year with $19.9 billion in sales, 26.1% adjusted segment operating margin (up 120bps), and $3.8 billion in cash flow from operations.
- Aerospace segment achieved 13% organic growth and 190bps margin expansion, driven by aftermarket strength and a balanced 51/49 split between aftermarket and OEM.
- Industrial segment delivered 25.1% adjusted margin (up 90bps) and a 700bps margin expansion since FY19, with 85% of portfolio now longer-cycle, secular, or aftermarket.
- Announced acquisition of Curtis Instruments to expand electrification capabilities, expected to close by end-2025.

**【CFO Financial Commentary】**
- Q4 FY25: $992 million adjusted net income, $7.69 EPS (14% YoY growth), 26.9% adjusted segment margin (up 160bps), and $3.8 billion CFOA (19% of sales).
- FY26 Guidance: $20.6 billion sales (2-5% growth), 26.5% adjusted segment margin (up 40bps), and $28.90 EPS (6% growth). Aerospace expected to drive 8% organic growth, while Industrial North America and International each grow 1%.
- Free cash flow projected at $3-4 billion, with 2.5% CapEx for automation and capacity expansion.

**【Q&A Highlights】**
- **Q1 FY26 Guidance**: EPS of $6.51 (5% YoY growth) despite 1% organic sales decline, driven by 40bps margin expansion and cost control.
- **Industrial Recovery**: Distributor sentiment positive, but delays in project execution due to tariffs and interest rates. Guidance assumes gradual recovery with 1% FY26 growth.
- **Curtis Acquisition**: Expected to be EPS accretive in FY26, with $50 million synergies over 3 years. Margins initially dilutive but on path to accretion.
- **Tariffs Management**: Teams successfully offset costs through pricing, dual sourcing, and local-for-local manufacturing.
- **Aerospace Momentum**: 8% FY26 organic growth driven by commercial transport rate increases, defense spending, and aftermarket demand.


Parker-Hannifin (PH)-7 Aug 25-2025 Q4 Earnings call transcript

- **Record Margins & Cash Flow**: 26.3% segment margin and $2.3B cash flow highlight operational excellence.
- **Order Growth Signal**: +9% orders point to 2026 industrial recovery, with aerospace backlog at $7.3B.
- **Tariff Resilience**: $375M tariff impact fully mitigated through pricing and supply chain agility.
- **Dividend & Buybacks**: 10% dividend hike and $650M share repurchases reinforce capital return commitment.
- **Aerospace Dominance**: 12% organic growth and 28.7% margin underscore aerospace as key growth driver.

**【CEO Summary Section】**
- **Record Financial Performance**: Achieved 26.3% adjusted segment operating margin and 27% EBITDA margin, with $2.3B year-to-date cash flow from operations.
- **Order Momentum**: Parker order rates increased to +9%, driven by long-cycle strength in aerospace and industrial sectors.
- **Win Strategy Execution**: Tools like Kaizen, 80/20 simplification, and dual sourcing enabled margin expansion despite 2% revenue decline.
- **Tariff Mitigation**: $375M annualized tariff impact fully offset through pricing, supply chain adjustments, and cost controls.

**【CFO Financial Commentary】**
- **Revenue & EPS Growth**: Sales down 2% (organic +1%), adjusted EPS up 7% to $6.94, with 160bps margin expansion.
- **Segment Performance**: Aerospace delivered 12% organic growth and 28.7% margin, while industrial businesses expanded margins despite volume headwinds.
- **Cash Flow Strength**: Free cash flow of $2B (13.7% of sales) supported 10% dividend increase and $650M share buybacks.

**【Market Vertical Updates】**
- **Aerospace & Defense**: FY2025 organic growth raised to 12% (from 11%), driven by aftermarket strength and defense recovery.
- **Industrial**: North America -4% organic growth (vs. prior -3%), International -2.5% (vs. -3%), with HVAC/R upshifted to high-single digits.
- **Energy**: Lower oil prices and capital discipline reduce growth to -low single digits.

**【Q&A Highlights】**
- **2026 Outlook**: Industrial organic growth expected to turn positive, supported by +9% Q3 orders and $7.3B aerospace backlog.
- **Tariff Strategy**: Pricing (50%), supply chain (30%), and cost actions (20%) fully offset tariffs; no footprint changes needed.
- **M&A Pipeline**: Active pipeline across all sizes; focus on strategic fits in filtration, semicon, and aerospace.
- **Europe Recovery**: Defense stimulus and infrastructure spending may drive long-term growth, but near-term industrial softness persists.

Parker-Hannifin (PH)-1 May 25-2025 Q3 Earnings call transcript

- **Record Margins & Growth**: Q2 adjusted segment margin 25.6%, aerospace sales +14% organically, all businesses hit records.
- **Win Strategy Payoff**: 110bps margin expansion via lean tools; example division cut defects by 52%.
- **Strong Cash Flow**: $1.5B free cash flow YTD, debt reduced $1.1B, debt/EBITDA 1.7x.
- **Aerospace Dominance**: FY25 aerospace growth raised to 11%, defense aftermarket +25%, MRO to high teens.
- **Industrial Caution**: FY25 industrial growth -2.5% (NA), flat intl., but orders positive in longer-cycle markets.


**【CEO Summary Section】**
- **Record Q2 Performance**: Adjusted segment operating margin reached 25.6%, with all businesses achieving record margins. Aerospace sales grew 14% organically, driven by 20%+ aftermarket growth.
- **Win Strategy Success**: 110bps margin expansion through Parker Lean System, Kaizen initiatives, and Simplify design tools. Example division in Filtration Group reduced rejected parts by 52% using zero-defect tools.
- **Market Outlook**: FY25 organic growth forecast at 2%, with aerospace raised to 11% (from 10%) and HVAC to mid-single digits. Industrial recovery delayed, but orders turned positive in longer-cycle businesses.

**【CFO Financial Highlights】**
- **Q2 Financials**: Adjusted EPS $6.53 (6% YoY), adjusted EBITDA margin 26.8%, and free cash flow $1.5B year-to-date. Debt reduced by $1.1B in Q2, bringing gross debt/EBITDA to 1.7x.
- **FY25 Guidance**: Organic growth 2% (midpoint), adjusted segment margin 25.8% (up 90bps YoY). Aerospace EPS contribution increased due to 11% growth vs. prior 10%.
- **Currency Impact**: 1% headwind for FY25, offset by strong cash flow and debt reduction.

**【Q&A Key Takeaways】**
- **Industrial Recovery**: Orders positive in longer-cycle businesses (HVAC, semicon), but distribution recovery delayed. FY25 North America industrial organic growth -2.5% (midpoint), International flat.
- **M&A Strategy**: Robust pipeline with focus on accretive, high-margin targets. Local-for-local model mitigates tariff risks.
- **Aerospace Momentum**: Defense aftermarket up 25%, commercial MRO growth to high teens. Q4 aerospace sales face tough comp (19% YoY last year), but FY25 guidance maintained at 11% growth.


Parker-Hannifin (PH)-30 Jan 25-2025 Q2 Earnings call transcript

Parker-Hannifin (PH)-31 Oct 24-2025 Q1 Earnings call transcript

Parker-Hannifin (PH)-8 Aug 24-2024 Q4 Earnings call transcript

Parker-Hannifin (PH)-2 May 24-2024 Q3 Earnings call transcript

Parker-Hannifin (PH)-1 Feb 24-2024 Q2 Earnings call transcript

- **Record Q1 Performance**: $4.8B sales (+15% YoY), $5.96 EPS, and 24.9% operating margin highlight execution of portfolio transformation.
- **Aerospace Growth Engine**: +65% sales, 26% margin, and 45% aftermarket mix drive FY '24 aerospace guidance to +10% organic growth.
- **Cash & Debt Discipline**: $552M free cash flow, 2.5x net debt/EBITDA, and $2B+ FY '24 debt paydown signal financial strength.
- **Win Strategy Resilience**: 40% incremental margins, 220bps margin expansion, and 85% long-cycle portfolio by FY '27 position for secular growth.

**【Management Remarks】**
- Parker Hannifin reported record Q1 sales of $4.8 billion, up 15% YoY, driven by aerospace and industrial growth.
- Organic growth of 2.3% reflects portfolio transformation into longer-cycle markets (85% by FY '27).
- Adjusted segment operating margin reached 24.9%, up 220bps YoY, with all segments exceeding 24%.

**【CEO Summary Section】**
- **Aerospace Dominance**: Aerospace sales grew 65% YoY to $1.2B, with 16% organic growth and 26% operating margin (up 610bps). Aftermarket now 45% of aerospace revenue (+800bps YoY).
- **Portfolio Shift**: Backlog coverage doubled to 54% since FY '16, with 2x growth in industrial backlog and resilient aerospace orders (+24% YoY).
- **Win Strategy Execution**: 40% incremental margins, 220bps margin expansion, and $776M net income ($5.96 EPS) reflect disciplined cost management and synergies from Meggitt acquisition.

**【CFO Financial Commentary】**
- **Cash Flow Strength**: $650M cash flow from ops (13.4% of sales) and $552M free cash flow (11.4% of sales), up 48% YoY.
- **Debt Reduction**: Reduced gross debt by $1.8B since Meggitt close, net debt/EBITDA to 2.5x, with $2B+ paydown guidance for FY '24.
- **Guidance Update**: FY '24 organic growth midpoint 1.5% (aerospace +10%), adjusted EPS $19.13 (midpoint), and 70bps margin expansion.

**【Q&A Highlights】**
- **North America Orders**: Q1 orders -4% YoY (vs -8% last quarter), with destocking in industrial but strong aerospace (+24% orders). Backlog resilience despite 5Q of negative industrial orders.
- **International Challenges**: Europe and Asia-Pacific (-8% organic) face China softness, while EMEA (+2%) and Latin America (+8%) offset.
- **Meggitt Synergies**: $75M FY '24 target (total $300M by FY '25), with 1-year anniversary performance exceeding expectations.
- **Lee Banks Retirement**: 32-year career marked by 7% CAGR, 292% TSR, and portfolio transformation. Succession plans ensure continuity under CEO Jennifer Parmentier.

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