Yahoo Finance Parker-Hannifin (PH) to Gain From Business Strength Amid Risks
Parker-Hannifin Corporation PH has been benefiting from strong momentum in commercial and military end markets across both OEM and aftermarket channels. The Aerospace Systems segment’s organic sales jumped 18% year over year in the third quarter of fiscal 2024 (ended March 2024). In the quarters ahead, the segment is poised to benefit from strong demand for its products and aftermarket support services in general aviation and military end markets.
The company remains focused on acquiring businesses to gain access to new customers, regions and product lines. In September 2022, it acquired Meggitt plc, a global leader in motion and control technologies. The acquisition expanded PH’s presence in the UK, positioning it well to provide a broader suite of solutions for aircraft, and aero-engine components and systems. Acquisitions boosted the company's sales by 3.4% in the first nine months of fiscal 2024.
Parker-Hannifin has been gaining from its unique Win Strategy, which focuses on innovation, strategic positioning and distribution growth. In the third quarter of fiscal 2024, segment’s adjusted operating margin increased 150 basis points year over year to 24.7%.
Also, it remains committed to rewarding its shareholders through dividend payouts. For instance, in the first nine months of fiscal 2024, the firm rewarded shareholders with dividends of $571.6 million, reflecting an increase of 11.4% year over year. Also, it hiked its quarterly dividend rate by 10% in April 2024.
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In the past six months, this Zacks Rank #3 (Hold) company's shares have increased 21.3% compared with the industry’s 13.9% growth.
However, challenging conditions in off-highway and transportation end markets have been hurting its Diversified Industrial North America segment’s performance. The segment’s organic sales declined 4.6% year over year in the fiscal third quarter.
Also, its weak liquidity position remains a concern. Exiting the fiscal third quarter, the company had cash and cash equivalents of $405.5 million, much lower than its current debt and short-term maturities of approximately $4.1 billion.
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Parker-Hannifin Corporation (PH) : Free Stock Analysis Report
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Luxfer Holdings PLC (LXFR) : Free Stock Analysis Report
