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Parker-Hannifin (PH) to Post Q2 Earnings: What's in Store?

Parker-Hannifin Corporation PH is slated to release second-quarter fiscal 2023 (ended Dec 31, 2022) results on Feb 2, before the market open.

The Zacks Consensus Estimate for the company’s fiscal second-quarter earnings has been revised downward by 0.2% in the past 60 days. However, the company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 11.3%.

Let’s see how things have shaped up for Parker-Hannifin’s fiscal second quarter.

ParkerHannifin Corporation Price and EPS Surprise

ParkerHannifin Corporation Price and EPS Surprise
ParkerHannifin Corporation Price and EPS Surprise

ParkerHannifin Corporation price-eps-surprise | ParkerHannifin Corporation Quote

Factors to Note

Strong demand across end markets, effective pricing and supply-chain management actions are expected to have aided Parker-Hannifin’s margin performance in the fiscal second quarter.

Robust revenues in the North American and International sub-segments are likely to have benefitted the Diversified Industrial segment’s performance in the to-be-reported quarter. Revenues in the Aerospace Systems segment are expected to have gained from an increase in orders in the to-be-reported quarter.

The acquisition of Meggitt (September 2022) is also likely to have augmented the company’s top line in the fiscal second quarter.

However, Parker-Hannifin’s bottom line might have been dented due to increasing cost of sales (mainly high raw material costs) and selling, general and administrative expenses. Given the company’s substantial international presence, foreign-currency headwinds are likely to have weighed on the company’s top line in the quarter to be reported.

The Zacks Consensus Estimate for Parker-Hannifin’s revenues in the fiscal second quarter suggests a 16.6% increase from the year-ago quarter’s reported number. However, the consensus mark for earnings indicates a decrease of 0.2% from the year-ago period’s reported figure.

Earnings Whispers

Our proven model suggests an earnings beat for PH this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is the case here, as elaborated below. You can see the complete list of today’s Zacks #1 Rank stocks here.

Earnings ESP: Parker-Hannifin has an Earnings ESP of +0.62% as the Most Accurate Estimate is pegged at $4.48, higher than the Zacks Consensus Estimate of $4.45. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: Parker-Hannifin carries a Zacks Rank of 3.

Highlights of Q1 Earnings

Parker-Hannifin reported first-quarter fiscal 2023 (ended Sep 30, 2022) adjusted earnings (excluding $1.76 from non-recurring items) of $4.74 per share, which beat the Zacks Consensus Estimate of $4.15. The bottom line improved approximately 11.3% year over year. Total revenues of $4,232.8 million also outperformed the Zacks Consensus Estimate of $3,923 million. The top line increased 12.5% year over year.

Other Stocks to Consider

Here are some other companies within the broader Industrial Products sector, which according to our model, have the right combination of elements to beat on earnings this reporting cycle.

IDEX Corporation IEX has an Earnings ESP of +2.96% and a Zacks Rank of 2 at present. The company is slated to release fourth-quarter 2022 results on Jan 31.

IDEX’s earnings have surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 5.7%.

Caterpillar CAT has an Earnings ESP of +1.14% and a Zacks Rank of 3. The company is scheduled to release fourth-quarter earnings numbers on Jan 31.

Caterpillar’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 14.7%.

Xylem Inc. XYL has an Earnings ESP of +2.10% and a Zacks Rank of 3. The company is scheduled to release fourth-quarter 2022 results on Feb 2.

Xylem’s earnings have surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 13.3%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Caterpillar Inc. (CAT) : Free Stock Analysis Report

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Xylem Inc. (XYL) : Free Stock Analysis Report

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