Parker Reports Fiscal 2026 Second Quarter Results

CLEVELAND, Jan. 29, 2026 (GLOBE NEWSWIRE) -- Parker Hannifin Corporation (NYSE:PH), the global leader in motion and control technologies, today reported results for the quarter ended December 31, 2025, that included the following highlights (compared with the prior year period):

Fiscal 2026 Second Quarter Highlights:

• Sales increased 9% to a record $5.2 billion; organic sales increased 6.6%
• Segment operating margin was 23.9%, an increase of 180 bps, or 27.1% adjusted, an increase of 150 bps
• Net income was $845 million, a decrease of 11% compared with the second quarter of fiscal 2025 which included a one-time after-tax gain from divestitures of $223 million
• Adjusted net income increased 15% to $980 million
• EPS were $6.60, a decrease of 9% compared with the second quarter of fiscal 2025 which included a one-time after-tax gain from divestitures of $1.70
• Adjusted EPS increased 17% to a record $7.65
  
  
  
  

"This was another outstanding quarter that reflected the performance of our global team, the power of our business system The Win Strategy™, and the strength of our transformed portfolio," said Jenny Parmentier, Chairman and Chief Executive Officer. "We delivered record sales with organic sales growth of nearly 7% and growth across all reported businesses. Our team expanded adjusted segment operating margin by 150 basis points and delivered an impressive 17% adjusted earnings per share growth. We also announced a definitive agreement to acquire Filtration Group Corporation, expanding our aftermarket business and presence in life sciences, HVAC/R, and in-plant and industrial market verticals. On the strength of our second quarter results, robust aerospace demand, and continued gradual recovery in our industrial markets, we are increasing our outlook for the full year."

This news release contains non-GAAP financial measures. Reconciliations of adjusted numbers and certain non-GAAP financial measures are included in the financial tables of this press release.

Outlook

Guidance for the fiscal year ending June 30, 2026 has been increased:

• Reported sales growth has been increased to the range of 5.5% to 7.5%. Organic sales growth of approximately 5% at the midpoint, acquisitions of approximately 1%, previously completed divestitures of approximately 1%, and favorable currency of 1.5%.
• Segment operating margin outlook has been increased to the range of 23.7% to 24.1%, or 27.0% to 27.4% on an adjusted basis.
• EPS guidance has been increased to the range of $26.26 to $26.86, or $30.40 to $31.00 on an adjusted basis.
  
  
  
  

Segment Results

Diversified Industrial Segment

North America Businesses
$ in mm
	FY26 Q2				FY25 Q2				Change			Organic Growth
Sales	$	1,986			$	1,928			3.0	%		2.5	%
Segment Operating Income	$	444			$	426			4.2	%
Segment Operating Margin		22.4	%			22.1	%		30 bps
Adjusted Segment Operating Income	$	504			$	473			6.6	%
Adjusted Segment Operating Margin		25.4	%			24.6	%		80 bps

• Organic growth positive, driven by in-plant & industrial, off-highway and aerospace & defense
• Achieved record adjusted segment operating margin
• Order rates increased to 7% driven by multi-year aerospace & defense bookings

International Businesses
$ in mm
	FY26 Q2				FY25 Q2				Change			Organic Growth
Sales	$	1,482			$	1,325			11.8	%		4.6	%
Segment Operating Income	$	348			$	284			22.5	%
Segment Operating Margin		23.5	%			21.4	%		210 bps
Adjusted Segment Operating Income	$	385			$	320			20.3	%
Adjusted Segment Operating Margin		26.0	%			24.1	%		190 bps

• Achieved record sales and adjusted segment operating margin
• Strong performance in Asia at 9% organic growth; EMEA returns to positive at 2% organic growth
• Order rates increased to 6%, driven by long-cycle aerospace & defense and electronics bookings

Aerospace Systems Segment
$ in mm
	FY26 Q2				FY25 Q2				Change			Organic Growth
Sales	$	1,706			$	1,490			14.5	%		13.5	%
Segment Operating Income	$	443			$	338			31.1	%
Segment Operating Margin		26.0	%			22.7	%		330 bps
Adjusted Segment Operating Income	$	515			$	420			22.6	%
Adjusted Segment Operating Margin		30.2	%			28.2	%		200 bps

• Achieved record sales on 26% commercial OEM growth and 17% aftermarket growth
• Delivered record adjusted segment operating margin
• Double digit order rates continued
• Robust multi-year backlog increased to a record $8 billion
  
  
  
  

Order Rates

	FY26 Q2
Parker	+9	%
Diversified Industrial Segment - North America Businesses	+7	%
Diversified Industrial Segment - International Businesses	+6	%
Aerospace Systems Segment	+14	%

• Order rates increased to 9% with all reported businesses generating positive growth
• Backlog increased to a record $11.7 billion
  
  
  
  

About Parker Hannifin

Parker Hannifin is a Fortune 250 global leader in motion and control technologies. For more than a century the company has been enabling engineering breakthroughs that lead to a better tomorrow. Learn more at www.parker.com or @parkerhannifin.

Contacts:
Media:	Financial Analysts:
Aidan Gormley	Jeff Miller
216-896-3258	216-896-2708
[email protected]	[email protected]

Notice of Webcast

Parker Hannifin's conference call and slide presentation to discuss its fiscal 2026 second quarter results are available to all interested parties via live webcast today at 11:00 a.m. ET, at investors.parker.com. A replay of the webcast will be available on the site approximately one hour after the completion of the call and will remain available for one year. To register for e-mail notification of future events please visit investors.parker.com.

Note on Orders

The company reported orders for the quarter ending December 31, 2025, compared with the same quarter a year ago. All comparisons are at constant currency exchange rates, with the prior year quarter restated to the current-year rates, and exclude divestitures. Diversified Industrial comparisons are on 3-month average computations and Aerospace Systems comparisons are on rolling 12-month average computations.

Note on Non-GAAP Financial Measures

This press release contains references to non-GAAP financial information including (a) adjusted net income; (b) adjusted earnings per share; (c) adjusted segment operating margin for Parker and by segment; (d) adjusted segment operating income for Parker and by segment; and (e) organic sales growth. These measures are presented to allow investors and the company to meaningfully evaluate changes in net income, earnings per share and segment operating margins on a comparable basis from period to period. Although these measures are not measures of performance calculated in accordance with GAAP, we believe that they are useful to an investor in evaluating the results of this quarter versus the prior period. Comparable descriptions of record adjusted results in this release refer only to the period from the first quarter of FY2011 to the periods presented in this release. This period coincides with recast historical financial results provided in association with our FY2014 change in segment reporting. A reconciliation of non-GAAP measures is included in the financial tables of this press release.

Forward-Looking Statements

Forward-looking statements contained in this and other written and oral reports are made based on known events and circumstances at the time of release, and as such, are subject in the future to unforeseen uncertainties and risks. Often but not always, these statements may be identified from the use of forward-looking terminology such as "anticipates," "believes," "may," "should," "could," "expects," "targets," "is likely," "will," or the negative of these terms and similar expressions, and may also include statements regarding future performance, orders, earnings projections, events or developments. Parker cautions readers not to place undue reliance on these statements. It is possible that the future performance may differ materially from expectations, including those based on past performance.

Among other factors that may affect future performance are: changes in business relationships with and orders by or from major customers, suppliers or distributors, including delays or cancellations in shipments; disputes regarding contract terms, changes in contract costs and revenue estimates for new development programs; changes in product mix; ability to identify acceptable strategic acquisition targets; uncertainties surrounding timing, successful completion or integration of acquisitions and similar transactions, including the pending acquisition of Filtration Group Corporation and the integration of Curtis Instruments, Inc.; ability to successfully divest businesses planned for divestiture and realize the anticipated benefits of such divestitures; the determination and ability to successfully undertake business realignment activities and the expected costs, including cost savings, thereof; ability to implement successfully business and operating initiatives, including the timing, price and execution of share repurchases and other capital initiatives; availability, cost increases of or other limitations on our access to raw materials, component products and/or commodities if associated costs cannot be recovered in product pricing; ability to manage costs related to insurance and employee retirement and health care benefits; legal and regulatory developments and other government actions, including related to environmental protection, and associated compliance costs; supply chain and labor disruptions, including as a result of tariffs and labor shortages; threats associated with international conflicts and cybersecurity risks and risks associated with protecting our intellectual property; uncertainties surrounding the ultimate resolution of outstanding legal proceedings, including the outcome of any appeals; effects on market conditions, including sales and pricing, resulting from global reactions to U.S. trade policies; manufacturing activity, air travel trends, currency exchange rates, difficulties entering new markets and economic conditions such as inflation, deflation, interest rates and credit availability; inability to obtain, or meet conditions imposed for, required governmental and regulatory approvals; changes in the tax laws in the United States and foreign jurisdictions and judicial or regulatory interpretations thereof; and large scale disasters, such as floods, earthquakes, hurricanes, industrial accidents and pandemics. Readers should also consider forward-looking statements in light of risk factors discussed in Parker's Annual Report on Form 10-K for the fiscal year ended June 30, 2025 and other periodic filings made with the SEC.

CONSOLIDATED STATEMENTS OF INCOME
	Three Months Ended								Six Months Ended
(Unaudited)	December 31,								December 31,
(In millions, except per share amounts)		2025				2024				2025				2024
Net sales	$	5,174			$	4,743			$	10,258			$	9,647
Cost of sales		3,243				3,022				6,420				6,120
Selling, general and administrative expenses		837				782				1,710				1,631
Interest expense		106				101				207				214
Other income, net		(76	)			(328	)			(183	)			(359	)
Income before income taxes		1,064				1,166				2,104				2,041
Income taxes		219				217				451				394
Net income	$	845			$	949				1,653				1,647
Earnings per share:
Basic	$	6.69			$	7.37			$	13.08			$	12.80
Diluted	$	6.60			$	7.25			$	12.89			$	12.60
Weighted average shares outstanding:
Basic		126.2				128.8				126.4				128.7
Diluted		128.1				130.8				128.2				130.7
Cash dividends per common share	$	1.80			$	1.63			$	3.60			$	3.26

BUSINESS SEGMENT INFORMATION
	Three Months Ended							Six Months Ended
(Unaudited)	December 31,							December 31,
(Dollars in millions)		2025			2024				2025			2024
Net sales
Diversified Industrial	$	3,468		$	3,253			$	6,911		$	6,709
Aerospace Systems		1,706			1,490				3,347			2,938
Total net sales	$	5,174		$	4,743			$	10,258		$	9,647
Segment operating income
Diversified Industrial	$	792		$	710			$	1,613		$	1,494
Aerospace Systems		443			338				854			661
Total segment operating income		1,235			1,048				2,467			2,155
Corporate general and administrative expenses		53			56				102			105
Income before interest expense and other expense (income), net		1,182			992				2,365			2,050
Interest expense		106			101				207			214
Other expense (income), net		12			(275	)			54			(205	)
Income before income taxes	$	1,064		$	1,166			$	2,104		$	2,041

SUPPLEMENTAL FINANCIAL INFORMATION AND NON-GAAP RECONCILIATIONS ADJUSTED SEGMENT OPERATING INCOME AND ORGANIC SALES GROWTH RECONCILIATION
	Three Months Ended December 31, 2025																	Three Months Ended December 31, 2024
	Diversified Industrial Segment									Aerospace Systems Segment								Diversified Industrial Segment									Aerospace Systems Segment
(Unaudited) (Dollars in millions)	North America			Int'l			Total						Total					North America			Int'l			Total						Total
Net sales	$	1,986		$	1,482		$	3,468		$	1,706		$	5,174				$	1,928		$	1,325		$	3,253		$	1,490		$	4,743
Segment operating income	$	444		$	348		$	792		$	443		$	1,235				$	426		$	284		$	710		$	338		$	1,048
Adjustments:
Amortization of acquired intangibles		49			24			73			75			148					41			22			63			75			138
Business realignment charges		3			10			13			—			13					6			14			20			—			20
Integration costs to achieve		4			—			4			(3	)		1					—			—			—			7			7
Acquisition-related expenses		4			3			7			—			7					—			—			—			—			—
Adjusted segment operating income	$	504		$	385		$	889		$	515		$	1,404				$	473		$	320		$	793		$	420		$	1,213
Segment operating margin		22.4	%		23.5	%		22.8	%		26.0	%		23.9	%				22.1	%		21.4	%		21.8	%		22.7	%		22.1	%
Adjusted segment operating margin		25.4	%		26.0	%		25.6	%		30.2	%		27.1	%				24.6	%		24.1	%		24.4	%		28.2	%		25.6	%
Reported sales growth		3.0	%		11.8	%		6.6	%		14.5	%		9.1	%
Currency		0.4	%		4.7	%		2.1	%		1.0	%		1.8	%
Divestitures		(2.0	)%		—	%		(1.2	)%		—	%		(0.8	)%
Acquisitions		2.1	%		2.5	%		2.3	%		—	%		1.5	%
Organic sales growth		2.5	%		4.6	%		3.4	%		13.5	%		6.6	%

	Six Months Ended December 31, 2025																	Six Months Ended December 31, 2024
	Diversified Industrial Segment									Aerospace Systems Segment								Diversified Industrial Segment									Aerospace Systems Segment
(Unaudited) (Dollars in millions)	North America			Int'l			Total						Total					North America			Int'l			Total						Total
Net sales	$	4,030		$	2,881		$	6,911		$	3,347		$	10,258				$	4,028		$	2,681		$	6,709		$	2,938		$	9,647
Segment operating income	$	951		$	662		$	1,613		$	854		$	2,467				$	911		$	583		$	1,494		$	661		$	2,155
Adjustments:
Amortization of acquired intangibles		91			46			137			151			288					84			44			128			150			278
Business realignment charges		4			23			27			1			28					9			20			29			—			29
Integration costs to achieve		5			1			6			1			7					1			—			1			12			13
Acquisition-related expenses		5			3			8			—			8					—			—			—			—			—
Adjusted segment operating income	$	1,056		$	735		$	1,791		$	1,007		$	2,798				$	1,005		$	647		$	1,652		$	823		$	2,475
Segment operating margin		23.6	%		23.0	%		23.3	%		25.5	%		24.0	%				22.6	%		21.7	%		22.3	%		22.5	%		22.3	%
Adjusted segment operating margin		26.2	%		25.5	%		25.9	%		30.1	%		27.3	%				24.9	%		24.1	%		24.6	%		28.0	%		25.7	%
Reported sales growth		—	%		7.5	%		3.0	%		13.9	%		6.3	%
Currency		0.1	%		3.3	%		1.4	%		0.8	%		1.1	%
Divestitures		(3.6	)%		—	%		(2.2	)%		—	%		(1.5	)%
Acquisitions		1.2	%		1.4	%		1.3	%		—	%		0.9	%
Organic sales growth		2.3	%		2.8	%		2.5	%		13.1	%		5.8	%

DIVERSIFIED INDUSTRIAL INTERNATIONAL BUSINESSES - ORGANIC SALES GROWTH SUPPLEMENT
	Three Months Ended December 31, 2025									Six Months Ended December 31, 2025
(Unaudited)	Europe		Asia Pacific		Latin America		Total			Europe		Asia Pacific		Latin America		Total
Reported sales growth	11.8	%	13.4	%	1.1	%	11.8	%		6.8	%	9.3	%	0.5	%	7.5	%
Currency	8.0	%	0.6	%	4.4	%	4.7	%		6.0	%	(0.4	)%	2.0	%	3.3	%
Acquisitions	1.7	%	3.8	%	—	%	2.5	%		1.0	%	2.2	%	—	%	1.4	%
Organic sales growth	2.1	%	9.0	%	(3.3	)%	4.6	%		(0.2	)%	7.5	%	(1.5	)%	2.8	%

ADJUSTED NET INCOME AND ADJUSTED DILUTED EARNINGS PER SHARE RECONCILIATION
	Three Months Ended December 31,														Six Months Ended December 31,
(Unaudited)		2025							2024							2025							2024
(Dollars in millions, except per share amounts)	Net Income			Diluted EPS				Net Income			Diluted EPS				Net Income			Diluted EPS				Net Income			Diluted EPS
As reported	$	845		$	6.60			$	949		$	7.25			$	1,653		$	12.89			$	1,647		$	12.60
Adjustments:
Amortization of acquired intangibles		148			1.15				138			1.06				288			2.24				278			2.13
Business realignment charges		13			0.10				21			0.16				28			0.22				31			0.23
Integration costs to achieve		1			0.01				7			0.05				7			0.05				13			0.10
Gain on sale of building		—			—				—			—				—			—				(10	)		(0.08	)
Gain on divestitures		—			—				(250	)		(1.91	)			—			—				(250	)		(1.91	)
Acquisition-related expenses1		14			0.11				—			—				28			0.22				—			—
Gain on insurance recoveries		—			—				—			—				(20	)		(0.15	)			—			—
Tax effect of adjustments2		(41	)		(0.32	)			(12	)		(0.08	)			(77	)		(0.60	)			(46	)		(0.33	)
As adjusted	$	980		$	7.65			$	853		$	6.53			$	1,907		$	14.87			$	1,663		$	12.74
1Acquisition-related expenses include transaction costs and charges related to the fair value step up of acquired inventory.
2This line item reflects the aggregate tax effect of all non-tax adjustments reflected in the preceding line items of the table. We estimate the tax effect of each adjustment item by applying our overall effective tax rate for continuing operations to the pre-tax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.

CONSOLIDATED BALANCE SHEETS
(Unaudited)	December 31,			June 30,
(Dollars in millions)		2025			2025
Assets
Current assets:
Cash and cash equivalents	$	427		$	467
Trade accounts receivable, net		2,757			2,910
Non-trade and notes receivable		307			318
Inventories		3,152			2,839
Prepaid expenses		367			263
Other current assets		183			153
Total current assets		7,193			6,950
Property, plant and equipment, net		2,966			2,937
Deferred income taxes		271			270
Other long-term assets		1,322			1,269
Intangible assets, net		7,610			7,374
Goodwill		11,149			10,694
Total assets	$	30,511		$	29,494
Liabilities and equity
Current liabilities:
Notes payable and long-term debt payable within one year	$	2,386		$	1,791
Accounts payable, trade		2,054			2,126
Accrued payrolls and other compensation		488			587
Accrued domestic and foreign taxes		221			382
Other current liabilities		937			933
Total current liabilities		6,086			5,819
Long-term debt		7,484			7,494
Pensions and other postretirement benefits		239			267
Deferred income taxes		1,610			1,490
Other long-term liabilities		772			733
Shareholders' equity		14,311			13,682
Noncontrolling interests		9			9
Total liabilities and equity	$	30,511		$	29,494

CONSOLIDATED STATEMENTS OF CASH FLOWS
	Six Months Ended
(Unaudited)	December 31,
(Dollars in millions)		2025				2024
Cash flows from operating activities:
Net income	$	1,653			$	1,647
Depreciation and amortization		465				455
Stock-based compensation expense		108				106
Gain on sale of businesses		(1	)			(250	)
Gain on property, plant and equipment		(8	)			(7	)
Net change in receivables, inventories and trade payables		(109	)			71
Net change in other assets and liabilities		(436	)			(405	)
Other, net		(28	)			62
Net cash provided by operating activities		1,644				1,679
Cash flows from investing activities:
Acquisitions, net of cash acquired		(1,013	)			—
Capital expenditures		(183	)			(216	)
Proceeds from sale of property, plant and equipment		32				13
Proceeds from sale of businesses		1				622
Other, net		17				(7	)
Net cash (used in) provided by investing activities		(1,146	)			412
Cash flows from financing activities:
Payments for common shares		(667	)			(192	)
Net proceeds from (payments for) debt		595				(1,494	)
Dividends paid		(456	)			(420	)
Other, net		(1	)			2
Net cash used in financing activities		(529	)			(2,104	)
Effect of exchange rate changes on cash		(9	)			(13	)
Net decrease in cash and cash equivalents		(40	)			(26	)
Cash and cash equivalents at beginning of year		467				422
Cash and cash equivalents at end of period	$	427			$	396

RECONCILIATION OF FORECASTED SALES GROWTH TO ORGANIC SALES GROWTH
(Unaudited)
(Amounts in percentages)	Fiscal Year 2026
Forecasted net sales	5.5% to 7.5%
Adjustments:
Currency	~(1.5%)
Acquisitions	~(1.0%)
Divestitures	~1.0%
Adjusted forecasted net sales	4.0% to 6.0%
RECONCILIATION OF FORECASTED SEGMENT OPERATING MARGIN TO ADJUSTED FORECASTED SEGMENT OPERATING MARGIN
(Unaudited)
(Amounts in percentages)	Fiscal Year 2026
Forecasted segment operating margin	23.7% to 24.1%
Adjustments:
Business realignment charges	~0.3%
Amortization of acquired intangibles	~2.8%
Cost to achieve	~0.1%
Acquisition-related expenses	~0.1%
Adjusted forecasted segment operating margin	27.0% to 27.4%

RECONCILIATION OF FORECASTED EARNINGS PER DILUTED SHARE TO ADJUSTED FORECASTED EARNINGS PER DILUTED SHARE
(Unaudited)
(Amounts in dollars)	Fiscal Year 2026
Forecasted earnings per diluted share	$26.26 to $26.86
Adjustments:
Business realignment charges	0.55
Amortization of acquired intangibles	4.57
Acquisition-related expenses	0.25
Costs to achieve	0.12
Gain on insurance recoveries	(0.16)
Tax effect of adjustments1	(1.19)
Adjusted forecasted earnings per diluted share	$30.40 to $31.00
1This line item reflects the aggregate tax effect of all non-tax adjustments reflected in the preceding line items of the table. We estimate the tax effect of each adjustment item by applying our overall effective tax rate for continuing operations to the pre-tax amount, unless the nature of the item and/or the tax jurisdiction in which the item has been recorded requires application of a specific tax rate or tax treatment, in which case the tax effect of such item is estimated by applying such specific tax rate or tax treatment.
Note: Totals may not foot due to rounding