Filed Under: ,
Tickers in this Article: PH
Parker Hannifin (NYSE:PH) announced its results for the first quarter on October 19, 2012. Parker Hannifin manufactures motion and control technologies and systems, including electromechanical controls, fluid power systems, and related components.

Earnings play an important role in measuring the appropriate valuation for a stock. Investors should be cautious if the company's stock price is high but it consistently has low earnings.SEE: 12 Things You Need To Know About Financial Statements

The Numbers:

Parker Hannifin fell short of estimates with $1.57 per share and revenues of $3.21 billion. Analysts were expecting $1.91 per share and revenues of $3.28 billion. Revenue fell 0.6% from the same period last year while EPS is down 17.8%. Slumping revenue in the last quarter ends Parker Hannifin's streak of four consecutive quarters of revenue increases. The company's net income for the quarter was $239.9 million. According to the reported number, this is down 19.3% from last year's figures. With last quarter's falling profit, the company ends a run of four consecutive quarters of year-over-year profit increases.

 

Management Quote:

"We delivered a solid level of earnings this quarter, in spite of ongoing weakness in international markets and softness in North America," said Chairman, CEO and President, Don Washkewicz.

 

A Look Back:

Gross margin shrank 2.4 percentage points to 22.9%. The contraction appeared to be driven by increased costs, which rose 2.6% from the year-earlier quarter, while revenue fell 0.6%.

Net income has increased 4.1% year-over-year on average across the last five quarters. The biggest gain came in the first quarter of the last fiscal year, when income climbed 20.2% from the year-earlier quarter.

 

Looking Ahead:

Over the past 60 days, the outlook for the company's performance next quarter has become increasingly unfavorable. The average estimate for the second quarter is $1.93 per share, a drop from $2.06. When analyst increase earnings estimates investors can assume business has been stronger than first thought and is an encouraging sign for investors. Decreasing earnings estimates is generally a negative sign as it suggests analyst believe future earnings to be weaker than previously anticipated. Over the past three months, the average estimate for the fiscal year has climbed from $7.11 per to share to $7.39.

 

comments powered by Disqus

Trading Center