Parker-Hannifin Corp
Q3 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +6.74%.
Did PH Beat Earnings? Q3 2025 Results
Parker Hannifin posted a mixed but broadly resilient fiscal third quarter, with adjusted earnings per share of $6.94 beating the $6.72 consensus estimate by 3.26%, even as revenue of $4.96 billion came in just 0.55% below expectations and declined 2.3% year-over-year. The clearest engine behind the earnings strength was a record adjusted segment operating margin of 26.3%, up 160 basis points, driven in large part by the Aerospace Systems segment, which delivered record sales of $1.57 billion on 11.7% organic growth and an adjusted margin of 28.7%. That momentum helped offset continued softness in the Diversified Industrial segments, where North America organic sales fell 3.5% on weakness in transportation and off-highway markets. Management also flagged an estimated $375 million annualized gross tariff impact, which it says is fully covered by mitigation actions. Looking ahead, Parker maintained its full-year adjusted EPS guidance midpoint at $26.70 and guided fourth-quarter adjusted EPS to approximately $7.05, while raising its Aerospace organic growth outlook to roughly 12%.
- Record adjusted segment operating margin of 26.3%, surpassing 26% for the first time
- Aerospace Systems delivered record sales on continued aftermarket strength with 11.7% organic growth
- Aerospace backlog increased to a record $7.3 billion
- Win Strategy business system driving margin expansion across all segments
- Order rates accelerated to +9% overall, reflecting transformed portfolio and long-cycle strength
- Record year-to-date cash flow from operations of $2.3 billion, up 8%
- Simplification and 80/20 initiatives driving margin expansion across cycles
“Our third quarter performance demonstrates the strength of our business and our global team's ability to continue to deliver record results. All reported businesses showed substantial margin expansion and helped us surpass 26% adjusted segment operating margin for the first time. We also produced record earnings per share, generated record cash flow from operations, and repurchased $650 million of shares. We recently announced a 10% increase in our quarterly cash dividend and are committed to our strategy of actively deploying capital to drive shareholder value, including acquisitions and increased share repurchase activity, depending on market conditions.”
Parker Hannifin CEO, on the earnings call
Forward Guidance & Outlook
For fiscal year 2025 ending June 30, 2025, Parker updated guidance: total sales growth of approximately -1% (organic growth ~1%, divestitures -1.5%, currency -0.5%); total segment operating margin of approximately 22.7% (approximately 25.9% adjusted); GAAP EPS of $25.92 to $26.12 and adjusted EPS of $26.60 to $26.80, which includes announced tariffs fully offset by mitigation actions with annualized gross tariff impact of approximately $375 million (~3% of COGS). Aerospace organic growth raised to ~12% while Industrial organic growth lowered to ~-3%. Full-year free cash flow guided at $3.1B to $3.2B with CapEx at ~2% of sales and FCF conversion above 100% on an adjusted basis. For Q4 FY25, the company expects sales of approximately $5.1B, adjusted segment operating margin of ~26.1%, and adjusted EPS midpoint of ~$7.05.
PH YoY Financials
PH Revenue by Segment
PH Revenue by Geography
Figures from SEC filings and company reports. Not investment advice.