Parker-Hannifin delivered a positive Q4, as reflected in the strong market reaction following its earnings announcement. Management attributed the company’s performance to a combination of robust growth in aerospace and off-highway verticals, productivity gains, and successful execution of its operating strategy. CEO Jennifer Parmentier highlighted the impact of “record Q2 sales, organic growth of 6.6%, and 150 basis points of margin expansion,” with notable contributions from commercial markets and a diversified portfolio. Segment operating margin expansion and increased backlog also played a significant role in the quarter’s results.
Is now the time to buy PH? Find out in our full research report (it’s free for active Edge members).
Parker-Hannifin (PH) Q4 CY2025 Highlights:
- Revenue: $5.17 billion vs analyst estimates of $5.07 billion (9.1% year-on-year growth, 2.1% beat)
- Adjusted EPS: $7.65 vs analyst estimates of $7.17 (6.8% beat)
- Adjusted EBITDA: $1.36 billion vs analyst estimates of $1.37 billion (26.2% margin, 1% miss)
- Management raised its full-year Adjusted EPS guidance to $30.70 at the midpoint, a 2.3% increase
- Operating Margin: 21.1%, up from 19.8% in the same quarter last year
- Organic Revenue rose 6.6% year on year (beat)
- Market Capitalization: $122.2 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Parker-Hannifin’s Q4 Earnings Call
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Jamie Cook (Truist Securities) asked if positive organic growth across all technology platforms was specific to Parker-Hannifin or a broader cycle trend. CEO Jennifer Parmentier explained it was a combination of Parker’s execution and some short-cycle recovery, with distribution channels showing positive momentum.
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Adam Farley (Citigroup) requested more detail on regional performance, particularly Europe’s outlook. Parmentier described Europe’s positive turn as driven by large project shipments and gradual improvement, while Asia Pacific benefited from electronics and semiconductors.
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Andrew Obin (Bank of America) questioned why international growth guidance suggested a sequential slowdown. Parmentier clarified that Q2’s result was boosted by one-time project shipments, and future quarters are expected to see more gradual growth.
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Scott Davis (Melius Research) inquired about the company’s approach to managing input cost inflation and pricing. Parmentier and CFO Todd Leombruno emphasized Parker’s longstanding discipline in pricing and cost management, noting that margin expansion reflected this capability.
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Brett Linzey (Mizuho) sought early insights into Filtration Group integration and cost synergy confidence. Parmentier expressed high confidence in achieving the $220 million target, citing extensive diligence and complementary technologies, though revenue synergies were not modeled.
Catalysts in Upcoming Quarters
In the coming quarters, the StockStory team will be monitoring (1) the pace and effectiveness of integrating Filtration Group and realization of targeted cost synergies, (2) sustained commercial aerospace demand and backlog conversion, and (3) incremental improvements in international industrial markets, especially Europe and Asia Pacific. Execution in these areas, along with management’s ability to offset inflationary pressures and manage working capital, will be critical indicators of continued progress.
Parker-Hannifin currently trades at $966.64, up from $916.27 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).
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